diff --git a/x-pack/plugins/observability_solution/observability_onboarding/public/application/quickstart_flows/otel_logs/index.tsx b/x-pack/plugins/observability_solution/observability_onboarding/public/application/quickstart_flows/otel_logs/index.tsx
index bb3b76556a617..4d0de71d6faaf 100644
--- a/x-pack/plugins/observability_solution/observability_onboarding/public/application/quickstart_flows/otel_logs/index.tsx
+++ b/x-pack/plugins/observability_solution/observability_onboarding/public/application/quickstart_flows/otel_logs/index.tsx
@@ -30,9 +30,9 @@ import { useKibana } from '@kbn/kibana-react-plugin/public';
 import useAsyncFn from 'react-use/lib/useAsyncFn';
 import { FormattedMessage } from '@kbn/i18n-react';
 import { ObservabilityOnboardingAppServices } from '../../..';
-import { ApiKeyBanner } from '../custom_logs/api_key_banner';
 import { useFetcher } from '../../../hooks/use_fetcher';
 import { MultiIntegrationInstallBanner } from './multi_integration_install_banner';
+import { EmptyPrompt } from '../shared/empty_prompt';
 import { FeedbackButtons } from '../shared/feedback_buttons';
 
 const HOST_COMMAND = i18n.translate(
@@ -46,11 +46,15 @@ const HOST_COMMAND = i18n.translate(
 export const OtelLogsPanel: React.FC = () => {
   const {
     data: apiKeyData,
-    status: apiKeyStatus,
     error,
-  } = useFetcher((callApi) => {
-    return callApi('POST /internal/observability_onboarding/otel/api_key', {});
-  }, []);
+    refetch,
+  } = useFetcher(
+    (callApi) => {
+      return callApi('POST /internal/observability_onboarding/otel/api_key', {});
+    },
+    [],
+    { showToastOnError: false }
+  );
 
   const { data: setup } = useFetcher((callApi) => {
     return callApi('GET /internal/observability_onboarding/logs/setup/environment');
@@ -116,15 +120,14 @@ rm ./otel.yml && cp ./otel_samples/platformlogs_hostmetrics.yml ./otel.yml && mk
 
   const selectedContent = installTabContents.find((tab) => tab.id === selectedTab)!;
 
+  if (error) {
+    return <EmptyPrompt onboardingFlowType="otel_logs" error={error} onRetryClick={refetch} />;
+  }
+
   return (
     <EuiPanel hasBorder paddingSize="xl">
       <EuiFlexGroup direction="column" gutterSize="none">
         <MultiIntegrationInstallBanner />
-        {error && (
-          <EuiFlexItem>
-            <ApiKeyBanner status={apiKeyStatus} payload={apiKeyData} error={error} />
-          </EuiFlexItem>
-        )}
         <EuiSteps
           steps={[
             {
diff --git a/x-pack/plugins/observability_solution/observability_onboarding/server/routes/logs/route.ts b/x-pack/plugins/observability_solution/observability_onboarding/server/routes/logs/route.ts
index a848ea50f9d96..017925cc44dee 100644
--- a/x-pack/plugins/observability_solution/observability_onboarding/server/routes/logs/route.ts
+++ b/x-pack/plugins/observability_solution/observability_onboarding/server/routes/logs/route.ts
@@ -6,6 +6,7 @@
  */
 
 import * as t from 'io-ts';
+import Boom from '@hapi/boom';
 import { createObservabilityOnboardingServerRoute } from '../create_observability_onboarding_server_route';
 import { getFallbackESUrl } from '../../lib/get_fallback_urls';
 import { getKibanaUrl } from '../../lib/get_fallback_urls';
@@ -80,6 +81,12 @@ const createAPIKeyRoute = createObservabilityOnboardingServerRoute({
     const {
       elasticsearch: { client },
     } = await context.core;
+
+    const hasPrivileges = await hasLogMonitoringPrivileges(client.asCurrentUser);
+    if (!hasPrivileges) {
+      throw Boom.forbidden('Insufficient permissions to create shipper API key');
+    }
+
     const { encoded: apiKeyEncoded } = await createShipperApiKey(client.asCurrentUser, 'otel logs');
 
     return { apiKeyEncoded };