diff --git a/v2/managedsettling.go b/v2/managedsettling.go
index 049e6d81..ac77a0ac 100644
--- a/v2/managedsettling.go
+++ b/v2/managedsettling.go
@@ -23,7 +23,7 @@ type ManagedSettler struct {
 func (m *ManagedSettler) Handle(ctx context.Context, settler MessageSettler, message *azservicebus.ReceivedMessage) {
 	if err := m.next(ctx, message); err != nil {
 		log(ctx, "error returned from the handler. Calling ManagedSettler error handler")
-		m.handleError(ctx, settler, message, err)
+		m.options.OnError(ctx, m.options, settler, message, err)
 		return
 	}
 	if err := settler.CompleteMessage(ctx, message, nil); err != nil {
@@ -70,6 +70,11 @@ func (s *ConstantDelayStrategy) GetDelay(_ uint32) time.Duration {
 
 // ManagedSettlingOptions allows to configure the ManagedSettling middleware
 type ManagedSettlingOptions struct {
+	// Allows to override the built-in error handling logic.
+	// OnError is called before any message settling action is taken.
+	// the ManagedSettlingOptions struct is passed as an argument so that the configuration
+	// like RetryDecision, RetryDelayStrategy and the post-settlement hooks can be reused and composed differently
+	OnError func(ctx context.Context, opts *ManagedSettlingOptions, settler MessageSettler, message *azservicebus.ReceivedMessage, handleErr error)
 	// RetryDecision is invoked to decide whether an error should be retried.
 	// the default is to retry 5 times before moving the message to the deadletter.
 	RetryDecision RetryDecision
@@ -95,21 +100,11 @@ type ManagedSettlingOptions struct {
 // the RetryDecision can be overridden and can inspect the error returned to decide to retry the message or not.
 // this allows to define error types that shouldn't be retried (and moved directly to the deadletter queue)
 func NewManagedSettlingHandler(opts *ManagedSettlingOptions, handler ManagedSettlingFunc) *ManagedSettler {
-	const (
-		defaultRetryDecisionMaxAttempts = 5
-		defaultDelay                    = 5 * time.Second
-	)
-	options := &ManagedSettlingOptions{
-		RetryDecision:      &MaxAttemptsRetryDecision{MaxAttempts: defaultRetryDecisionMaxAttempts},
-		RetryDelayStrategy: &ConstantDelayStrategy{Delay: defaultDelay},
-		OnCompleted: func(_ context.Context, _ *azservicebus.ReceivedMessage) {
-		},
-		OnAbandoned: func(_ context.Context, _ *azservicebus.ReceivedMessage, _ error) {
-		},
-		OnDeadLettered: func(_ context.Context, _ *azservicebus.ReceivedMessage, _ error) {
-		},
-	}
+	options := defaultManagedSettlingOptions()
 	if opts != nil {
+		if opts.OnError != nil {
+			options.OnError = opts.OnError
+		}
 		if opts.RetryDecision != nil {
 			options.RetryDecision = opts.RetryDecision
 		}
@@ -132,11 +127,33 @@ func NewManagedSettlingHandler(opts *ManagedSettlingOptions, handler ManagedSett
 	}
 }
 
-func (m *ManagedSettler) handleError(ctx context.Context, settler MessageSettler, message *azservicebus.ReceivedMessage, handleErr error) {
+func defaultManagedSettlingOptions() *ManagedSettlingOptions {
+	const (
+		defaultRetryDecisionMaxAttempts = 5
+		defaultDelay                    = 5 * time.Second
+	)
+	return &ManagedSettlingOptions{
+		OnError:            handleError,
+		RetryDecision:      &MaxAttemptsRetryDecision{MaxAttempts: defaultRetryDecisionMaxAttempts},
+		RetryDelayStrategy: &ConstantDelayStrategy{Delay: defaultDelay},
+		OnCompleted: func(_ context.Context, _ *azservicebus.ReceivedMessage) {
+		},
+		OnAbandoned: func(_ context.Context, _ *azservicebus.ReceivedMessage, _ error) {
+		},
+		OnDeadLettered: func(_ context.Context, _ *azservicebus.ReceivedMessage, _ error) {
+		},
+	}
+}
+
+func handleError(ctx context.Context,
+	options *ManagedSettlingOptions,
+	settler MessageSettler,
+	message *azservicebus.ReceivedMessage,
+	handleErr error) {
 	if handleErr == nil {
 		handleErr = fmt.Errorf("nil error: %w", handleErr)
 	}
-	if !m.options.RetryDecision.CanRetry(handleErr, message) {
+	if !options.RetryDecision.CanRetry(handleErr, message) {
 		log(ctx, "moving message to dead letter queue because processing failed to an error: %s", handleErr)
 		deadLetterSettlement.settle(ctx, settler, message, &azservicebus.DeadLetterOptions{
 			Reason:             to.Ptr("ManagedSettlingHandlerDeadLettering"),
@@ -144,14 +161,14 @@ func (m *ManagedSettler) handleError(ctx context.Context, settler MessageSettler
 			PropertiesToModify: nil,
 		})
 		// this could be a special hook to have more control on deadlettering, but keeping it simple for now
-		m.options.OnDeadLettered(ctx, message, handleErr)
+		options.OnDeadLettered(ctx, message, handleErr)
 		return
 	}
 	// the delay is implemented as an in-memory sleep before calling abandon.
 	// this will continue renewing the lock on the message while we wait for this delay to pass.
-	delay := m.options.RetryDelayStrategy.GetDelay(message.DeliveryCount)
+	delay := options.RetryDelayStrategy.GetDelay(message.DeliveryCount)
 	log(ctx, "delay strategy return delay of %s", delay)
 	time.Sleep(delay)
 	abandonSettlement.settle(ctx, settler, message, nil)
-	m.options.OnAbandoned(ctx, message, handleErr)
+	options.OnAbandoned(ctx, message, handleErr)
 }
diff --git a/v2/managedsettling_test.go b/v2/managedsettling_test.go
index dc7d2a50..303c6f0a 100644
--- a/v2/managedsettling_test.go
+++ b/v2/managedsettling_test.go
@@ -153,9 +153,8 @@ func TestManagedSettler_Handle(t *testing.T) {
 }
 
 func Test_NilErr_WrappedInDeadLetter(t *testing.T) {
-	h := NewManagedSettlingHandler(nil, nil)
 	settler := &fakeSettler{}
-	h.handleError(context.TODO(), settler, &azservicebus.ReceivedMessage{DeliveryCount: 6}, nil)
+	handleError(context.TODO(), defaultManagedSettlingOptions(), settler, &azservicebus.ReceivedMessage{DeliveryCount: 6}, nil)
 	g := NewWithT(t)
 	g.Expect(*settler.deadletterOptions.ErrorDescription).To(HavePrefix("nil error:"))
 }
@@ -173,15 +172,31 @@ func TestDefaultOptions_CallDefaultHooks(t *testing.T) {
 	g.Expect(settler.completed).To(BeTrue())
 
 	settler = &fakeSettler{}
-	h.handleError(context.TODO(), settler, &azservicebus.ReceivedMessage{DeliveryCount: 0}, fmt.Errorf("oops"))
+	defaultOptions := defaultManagedSettlingOptions()
+	handleError(context.TODO(), defaultOptions, settler, &azservicebus.ReceivedMessage{DeliveryCount: 0}, fmt.Errorf("oops"))
 	g.Expect(settler.abandoned).To(BeTrue())
 
 	settler = &fakeSettler{}
-	h.handleError(context.TODO(), settler, &azservicebus.ReceivedMessage{DeliveryCount: 6}, fmt.Errorf("oops"))
+	handleError(context.TODO(), defaultOptions, settler, &azservicebus.ReceivedMessage{DeliveryCount: 6}, fmt.Errorf("oops"))
 	g.Expect(settler.deadlettered).To(BeTrue())
 	g.Expect(*settler.deadletterOptions.ErrorDescription).To(Equal("oops"))
 }
 
+func TestOnErrorOverride(t *testing.T) {
+	g := NewWithT(t)
+	settler := &fakeSettler{}
+	opts := defaultManagedSettlingOptions()
+	var onErrorCalled bool
+	opts.OnError = func(ctx context.Context, opts *ManagedSettlingOptions, settler MessageSettler, message *azservicebus.ReceivedMessage, handleErr error) {
+		onErrorCalled = true
+	}
+	h := NewManagedSettlingHandler(opts, func(_ context.Context, _ *azservicebus.ReceivedMessage) error {
+		return fmt.Errorf("failed")
+	})
+	h.Handle(context.Background(), settler, &azservicebus.ReceivedMessage{})
+	g.Expect(onErrorCalled).To(BeTrue())
+}
+
 func TestMaxAttemptsRetryDecision(t *testing.T) {
 	for _, tc := range []struct {
 		maxAttempts   uint32