diff --git a/src/apm_cli/compilation/agents_compiler.py b/src/apm_cli/compilation/agents_compiler.py
index 8e0968f6c..b09559d6a 100644
--- a/src/apm_cli/compilation/agents_compiler.py
+++ b/src/apm_cli/compilation/agents_compiler.py
@@ -1276,14 +1276,12 @@ def _write_output_file_with_config(
 
         if config.agents_md_mode == "managed_section":
             target = Path(output_path)
-            if not target.is_file():
-                raise ManagedSectionError(
-                    f"{target} does not exist yet. "
-                    "Create it with the managed-section markers first, "
-                    "or set agents_md.mode: full in apm.yml for initial generation."
-                )
-            existing = target.read_text(encoding="utf-8")
             try:
+                if not target.exists():
+                    raise ManagedSectionError(
+                        f"[{target.name}] does not exist yet. Create it with markers first, or use mode: full for initial generation."
+                    )
+                existing = target.read_text(encoding="utf-8")
                 content = apply_managed_section(
                     existing,
                     content,
@@ -1291,7 +1289,7 @@ def _write_output_file_with_config(
                     config.agents_md_end_marker,
                 )
             except ManagedSectionError as exc:
-                raise ManagedSectionError(f"[{target}] {exc}") from exc
+                raise ManagedSectionError(f"[{target.name}] {exc}") from exc
         elif config.agents_md_mode != "full":
             raise ValueError(
                 f"Unknown agents_md.mode {config.agents_md_mode!r}. "
diff --git a/tests/unit/compilation/test_managed_section.py b/tests/unit/compilation/test_managed_section.py
index 7dee76894..c96f8419f 100644
--- a/tests/unit/compilation/test_managed_section.py
+++ b/tests/unit/compilation/test_managed_section.py
@@ -374,5 +374,11 @@ def test_write_output_file_managed_section_directory_at_path(self, tmp_path):
         )
 
         compiler = AgentsCompiler(str(tmp_path))
+        with pytest.raises(ManagedSectionError) as exc_info:
+            compiler._write_output_file_with_config(str(output_file), "New content.\n", config)
+        
+        msg = str(exc_info.value)
+        assert "AGENTS.md does not exist yet. Create it with markers first, or use mode: full for initial generation." in msg
+        assert msg.startswith("[")
         with pytest.raises(ManagedSectionError, match=r"(?i)does not exist|not exist|create it"):
             compiler._write_output_file_with_config(str(output_file), "New content.\n", config)