diff --git a/cli/run/watch-cli.ts b/cli/run/watch-cli.ts
index 9629f8fd420..fb2ef95de75 100644
--- a/cli/run/watch-cli.ts
+++ b/cli/run/watch-cli.ts
@@ -129,7 +129,6 @@ export async function watch(command: any) {
 					if (event.result && event.result.getTimings) {
 						printTimings(event.result.getTimings());
 					}
-					event.result.close().catch(error => handleError(error, true));
 					break;
 
 				case 'END':
@@ -137,6 +136,10 @@ export async function watch(command: any) {
 						stderr(`\n[${dateTime()}] waiting for changes...`);
 					}
 			}
+
+			if ('result' in event && event.result) {
+				event.result.close().catch(error => handleError(error, true));
+			}
 		});
 	}
 
diff --git a/docs/02-javascript-api.md b/docs/02-javascript-api.md
index 0db750c6f66..cfa9429466d 100755
--- a/docs/02-javascript-api.md
+++ b/docs/02-javascript-api.md
@@ -196,11 +196,15 @@ watcher.on('event', event => {
   //   END          — finished building all bundles
   //   ERROR        — encountered an error while bundling
   //                  * event.error contains the error that was thrown
+  //                  * event.result is null for build errors and contains the
+  //                    bundle object for output generation errors. As with
+  //                    "BUNDLE_END", you should call "event.result.close()" if
+  //                    present once you are done.
 });
 
 // This will make sure that bundles are properly closed after each run
-watcher.on('event', ({ code, result }) => {
-  if (code === 'BUNDLE_END') {
+watcher.on('event', ({ result }) => {
+  if (result) {
   	result.close();
   }
 });
diff --git a/src/rollup/types.d.ts b/src/rollup/types.d.ts
index f4c2fa90215..a185e66f80a 100644
--- a/src/rollup/types.d.ts
+++ b/src/rollup/types.d.ts
@@ -857,7 +857,7 @@ export type RollupWatcherEvent =
 			result: RollupBuild;
 	  }
 	| { code: 'END' }
-	| { code: 'ERROR'; error: RollupError };
+	| { code: 'ERROR'; error: RollupError; result: RollupBuild | null };
 
 export interface RollupWatcher
 	extends TypedEventEmitter<{
diff --git a/src/watch/watch.ts b/src/watch/watch.ts
index 142c9e78e35..b6a1881fdb6 100644
--- a/src/watch/watch.ts
+++ b/src/watch/watch.ts
@@ -100,27 +100,18 @@ export class Watcher {
 
 	private async run() {
 		this.running = true;
-
 		this.emitter.emit('event', {
 			code: 'START'
 		});
 
-		try {
-			for (const task of this.tasks) {
-				await task.run();
-			}
-			this.running = false;
-			this.emitter.emit('event', {
-				code: 'END'
-			});
-		} catch (error) {
-			this.running = false;
-			this.emitter.emit('event', {
-				code: 'ERROR',
-				error
-			});
+		for (const task of this.tasks) {
+			await task.run();
 		}
 
+		this.running = false;
+		this.emitter.emit('event', {
+			code: 'END'
+		});
 		if (this.rerun) {
 			this.rerun = false;
 			this.invalidate();
@@ -182,7 +173,7 @@ export class Task {
 		this.watcher.invalidate({ id, event: details.event });
 	}
 
-	async run() {
+	async run(): Promise<void> {
 		if (!this.invalidated) return;
 		this.invalidated = false;
 
@@ -198,14 +189,15 @@ export class Task {
 			input: this.options.input,
 			output: this.outputFiles
 		});
+		let result: RollupBuild | null = null;
 
 		try {
-			const result = await rollupInternal(options, this.watcher.emitter);
+			result = await rollupInternal(options, this.watcher.emitter);
 			if (this.closed) {
 				return;
 			}
 			this.updateWatchedFiles(result);
-			this.skipWrite || (await Promise.all(this.outputs.map(output => result.write(output))));
+			this.skipWrite || (await Promise.all(this.outputs.map(output => result!.write(output))));
 			this.watcher.emitter.emit('event', {
 				code: 'BUNDLE_END',
 				duration: Date.now() - start,
@@ -214,19 +206,21 @@ export class Task {
 				result
 			});
 		} catch (error) {
-			if (this.closed) {
-				return;
-			}
-
-			if (Array.isArray(error.watchFiles)) {
-				for (const id of error.watchFiles) {
-					this.watchFile(id);
+			if (!this.closed) {
+				if (Array.isArray(error.watchFiles)) {
+					for (const id of error.watchFiles) {
+						this.watchFile(id);
+					}
+				}
+				if (error.id) {
+					this.cache.modules = this.cache.modules.filter(module => module.id !== error.id);
 				}
 			}
-			if (error.id) {
-				this.cache.modules = this.cache.modules.filter(module => module.id !== error.id);
-			}
-			throw error;
+			this.watcher.emitter.emit('event', {
+				code: 'ERROR',
+				error,
+				result
+			});
 		}
 	}
 
diff --git a/test/cli/samples/watch/close-on-generate-error/_config.js b/test/cli/samples/watch/close-on-generate-error/_config.js
new file mode 100644
index 00000000000..a94f8646c41
--- /dev/null
+++ b/test/cli/samples/watch/close-on-generate-error/_config.js
@@ -0,0 +1,19 @@
+const { assertIncludes } = require('../../../../utils.js');
+
+module.exports = {
+	description: 'closes the bundle on generate errors',
+	command: 'rollup -cw',
+	abortOnStderr(data) {
+		if (data.includes('Bundle closed')) {
+			return true;
+		}
+	},
+	stderr(stderr) {
+		assertIncludes(
+			stderr,
+			'[!] Error: You must specify "output.file" or "output.dir" for the build.'
+		);
+		assertIncludes(stderr, 'Bundle closed');
+		return false;
+	}
+};
diff --git a/test/cli/samples/watch/close-on-generate-error/main.js b/test/cli/samples/watch/close-on-generate-error/main.js
new file mode 100644
index 00000000000..7a4e8a723a4
--- /dev/null
+++ b/test/cli/samples/watch/close-on-generate-error/main.js
@@ -0,0 +1 @@
+export default 42;
diff --git a/test/cli/samples/watch/close-on-generate-error/rollup.config.js b/test/cli/samples/watch/close-on-generate-error/rollup.config.js
new file mode 100644
index 00000000000..2b5ed8843ea
--- /dev/null
+++ b/test/cli/samples/watch/close-on-generate-error/rollup.config.js
@@ -0,0 +1,14 @@
+export default {
+	input: 'main.js',
+	plugins: [
+		{
+			name: 'faulty-close',
+			closeBundle() {
+				console.error('Bundle closed')
+			}
+		}
+	],
+	output: {
+		format: "es"
+	}
+};