Couldnt apply a label at this time

Question

Shim Kwan 311

Hi,

Out of the blue this morning, we get this error message when trying to apply an AIP Label.

Any idea why it suddenly just stopped working?
Are there any other logs we could look at to find out why it is suddenly not working?

Cheers

Tania Kundu 0 Reputation points

2026-10-12T08:58:07.9166667+00:00

I am getting same error too. This is happening with sensitivity labels that have encryption enabled. Is this an MS back end issue?

1 answer

Tania Kundu 0 Reputation points

2026-10-12T08:58:07.9166667+00:00

I am getting same error too. This is happening with sensitivity labels that have encryption enabled. Is this an MS back end issue?

Answer 1

Salamat Shah 830 MVP

Seems to be backend issue but check below too:

Verify that the Microsoft Purview sensitivity labeling service is accessible and functioning normally.

Confirm the user can retrieve label policies from Microsoft 365.

Check for recent changes to sensitivity labels, publishing policies, or licensing.

Ensure Office is signed in with the correct account and update Office to the latest version.

Review client logs using Microsoft Information Protection Diagnostics and Office telemetry logs for detailed error information.

Tania Kundu 0 Reputation points

2026-10-12T09:27:22.62+00:00

This was working fine till last week. But from today, I am getting this error while applying labels that have encryption enabled and also while downloading power BI reports that have these labels applied.
No recent changes have been made to these labels, labelling policies and licenses.. Happening with multiple users. Both in Office online and desktop app.
Salamat Shah 830 Reputation points MVP

2026-10-12T09:33:22.87+00:00

If the feature is working for other users in the same organization, please check with your AIP team and verify whether your account is still included in the applicable sensitivity labeling policy. In many organizations, policies are assigned through security groups, and if a user is no longer a member of the required group, issues like this can occur.

Additionally, review the Microsoft 365 Admin Center and Service Health Dashboard to determine whether there are any active incidents or advisories. At times, a service issue or maintenance activity affecting a specific region may impact label application and policy synchronization.
Tania Kundu 0 Reputation points

2026-10-12T09:36:15.71+00:00

Looks like all users are impacted, nothing in the Service Health dashboard. Labelling policy covers all users and groups.