diff --git a/packages/indexer-common/src/indexer-management/allocations.ts b/packages/indexer-common/src/indexer-management/allocations.ts
index 569632408..5166e17d7 100644
--- a/packages/indexer-common/src/indexer-management/allocations.ts
+++ b/packages/indexer-common/src/indexer-management/allocations.ts
@@ -371,7 +371,6 @@ export class AllocationManager {
     // Check that the subgraph is syncing and healthy before allocating
     // Throw error if:
     //    - subgraph deployment is not syncing,
-    //    - subgraph deployment is failed
     const status = context.indexingStatuses.find(
       (status) => status.subgraphDeployment.ipfsHash == deployment.ipfsHash,
     )
@@ -381,12 +380,6 @@ export class AllocationManager {
         `Subgraph deployment, '${deployment.ipfsHash}', is not syncing`,
       )
     }
-    if (status?.health == 'failed') {
-      throw indexerError(
-        IndexerErrorCode.IE077,
-        `Subgraph deployment, '${deployment.ipfsHash}', has failed`,
-      )
-    }
 
     logger.debug('Obtain a unique Allocation ID')
     const { allocationSigner, allocationId } = uniqueAllocationID(