diff --git a/litellm/proxy/litellm_pre_call_utils.py b/litellm/proxy/litellm_pre_call_utils.py
index 94ff51fd2a..2702da79fe 100644
--- a/litellm/proxy/litellm_pre_call_utils.py
+++ b/litellm/proxy/litellm_pre_call_utils.py
@@ -691,20 +691,24 @@ def _enforced_params_check(
     return True
 
 
-def move_guardrails_to_metadata(
+def _add_guardrails_from_key_or_team_metadata(
+    key_metadata: Optional[dict],
+    team_metadata: Optional[dict],
     data: dict,
-    _metadata_variable_name: str,
-    user_api_key_dict: UserAPIKeyAuth,
-):
+    metadata_variable_name: str,
+) -> None:
     """
-    Heper to add guardrails from request to metadata
+    Helper add guardrails from key or team metadata to request data
 
-    - If guardrails set on API Key metadata then sets guardrails on request metadata
-    - If guardrails not set on API key, then checks request metadata
+    Args:
+        key_metadata: The key metadata dictionary to check for guardrails
+        team_metadata: The team metadata dictionary to check for guardrails
+        data: The request data to update
+        metadata_variable_name: The name of the metadata field in data
 
     """
-    if user_api_key_dict.metadata:
-        if "guardrails" in user_api_key_dict.metadata:
+    for _management_object_metadata in [key_metadata, team_metadata]:
+        if _management_object_metadata and "guardrails" in _management_object_metadata:
             from litellm.proxy.proxy_server import premium_user
 
             if premium_user is not True:
@@ -712,11 +716,31 @@ def move_guardrails_to_metadata(
                     f"Using Guardrails on API Key {CommonProxyErrors.not_premium_user}"
                 )
 
-            data[_metadata_variable_name]["guardrails"] = user_api_key_dict.metadata[
+            data[metadata_variable_name]["guardrails"] = _management_object_metadata[
                 "guardrails"
             ]
-            return
 
+
+def move_guardrails_to_metadata(
+    data: dict,
+    _metadata_variable_name: str,
+    user_api_key_dict: UserAPIKeyAuth,
+):
+    """
+    Helper to add guardrails from request to metadata
+
+    - If guardrails set on API Key metadata then sets guardrails on request metadata
+    - If guardrails not set on API key, then checks request metadata
+    """
+    # Check key-level guardrails
+    _add_guardrails_from_key_or_team_metadata(
+        key_metadata=user_api_key_dict.metadata,
+        team_metadata=user_api_key_dict.team_metadata,
+        data=data,
+        metadata_variable_name=_metadata_variable_name,
+    )
+
+    # Check request-level guardrails
     if "guardrails" in data:
         data[_metadata_variable_name]["guardrails"] = data["guardrails"]
         del data["guardrails"]
diff --git a/litellm/proxy/management_endpoints/team_endpoints.py b/litellm/proxy/management_endpoints/team_endpoints.py
index c20bbcb959..f7ffd8fecc 100644
--- a/litellm/proxy/management_endpoints/team_endpoints.py
+++ b/litellm/proxy/management_endpoints/team_endpoints.py
@@ -58,7 +58,8 @@ from litellm.proxy.management_helpers.utils import (
     add_new_member,
     management_endpoint_wrapper,
 )
-from litellm.proxy.utils import PrismaClient, _premium_user_check
+from litellm.proxy.utils import PrismaClient, handle_exception_on_proxy, _premium_user_check
+
 
 router = APIRouter()
 
@@ -175,177 +176,182 @@ async def new_team(  # noqa: PLR0915
             }'
     ```
     """
-    from litellm.proxy.proxy_server import (
-        create_audit_log_for_update,
-        duration_in_seconds,
-        litellm_proxy_admin_name,
-        prisma_client,
-    )
-
-    if prisma_client is None:
-        raise HTTPException(status_code=500, detail={"error": "No db connected"})
-
-    if data.team_id is None:
-        data.team_id = str(uuid.uuid4())
-    else:
-        # Check if team_id exists already
-        _existing_team_id = await prisma_client.get_data(
-            team_id=data.team_id, table_name="team", query_type="find_unique"
+    try:
+        from litellm.proxy.proxy_server import (
+            create_audit_log_for_update,
+            duration_in_seconds,
+            litellm_proxy_admin_name,
+            prisma_client,
         )
-        if _existing_team_id is not None:
-            raise HTTPException(
-                status_code=400,
-                detail={
-                    "error": f"Team id = {data.team_id} already exists. Please use a different team id."
-                },
-            )
 
-    if (
-        user_api_key_dict.user_role is None
-        or user_api_key_dict.user_role != LitellmUserRoles.PROXY_ADMIN
-    ):  # don't restrict proxy admin
-        if (
-            data.tpm_limit is not None
-            and user_api_key_dict.tpm_limit is not None
-            and data.tpm_limit > user_api_key_dict.tpm_limit
-        ):
-            raise HTTPException(
-                status_code=400,
-                detail={
-                    "error": f"tpm limit higher than user max. User tpm limit={user_api_key_dict.tpm_limit}. User role={user_api_key_dict.user_role}"
-                },
+        if prisma_client is None:
+            raise HTTPException(status_code=500, detail={"error": "No db connected"})
+
+        if data.team_id is None:
+            data.team_id = str(uuid.uuid4())
+        else:
+            # Check if team_id exists already
+            _existing_team_id = await prisma_client.get_data(
+                team_id=data.team_id, table_name="team", query_type="find_unique"
             )
+            if _existing_team_id is not None:
+                raise HTTPException(
+                    status_code=400,
+                    detail={
+                        "error": f"Team id = {data.team_id} already exists. Please use a different team id."
+                    },
+                )
 
         if (
-            data.rpm_limit is not None
-            and user_api_key_dict.rpm_limit is not None
-            and data.rpm_limit > user_api_key_dict.rpm_limit
-        ):
-            raise HTTPException(
-                status_code=400,
-                detail={
-                    "error": f"rpm limit higher than user max. User rpm limit={user_api_key_dict.rpm_limit}. User role={user_api_key_dict.user_role}"
+            user_api_key_dict.user_role is None
+            or user_api_key_dict.user_role != LitellmUserRoles.PROXY_ADMIN
+        ):  # don't restrict proxy admin
+            if (
+                data.tpm_limit is not None
+                and user_api_key_dict.tpm_limit is not None
+                and data.tpm_limit > user_api_key_dict.tpm_limit
+            ):
+                raise HTTPException(
+                    status_code=400,
+                    detail={
+                        "error": f"tpm limit higher than user max. User tpm limit={user_api_key_dict.tpm_limit}. User role={user_api_key_dict.user_role}"
+                    },
+                )
+
+            if (
+                data.rpm_limit is not None
+                and user_api_key_dict.rpm_limit is not None
+                and data.rpm_limit > user_api_key_dict.rpm_limit
+            ):
+                raise HTTPException(
+                    status_code=400,
+                    detail={
+                        "error": f"rpm limit higher than user max. User rpm limit={user_api_key_dict.rpm_limit}. User role={user_api_key_dict.user_role}"
+                    },
+                )
+
+            if (
+                data.max_budget is not None
+                and user_api_key_dict.max_budget is not None
+                and data.max_budget > user_api_key_dict.max_budget
+            ):
+                raise HTTPException(
+                    status_code=400,
+                    detail={
+                        "error": f"max budget higher than user max. User max budget={user_api_key_dict.max_budget}. User role={user_api_key_dict.user_role}"
+                    },
+                )
+
+            if data.models is not None and len(user_api_key_dict.models) > 0:
+                for m in data.models:
+                    if m not in user_api_key_dict.models:
+                        raise HTTPException(
+                            status_code=400,
+                            detail={
+                                "error": f"Model not in allowed user models. User allowed models={user_api_key_dict.models}. User id={user_api_key_dict.user_id}"
+                            },
+                        )
+
+        if user_api_key_dict.user_id is not None:
+            creating_user_in_list = False
+            for member in data.members_with_roles:
+                if member.user_id == user_api_key_dict.user_id:
+                    creating_user_in_list = True
+
+            if creating_user_in_list is False:
+                data.members_with_roles.append(
+                    Member(role="admin", user_id=user_api_key_dict.user_id)
+                )
+
+        ## ADD TO MODEL TABLE
+        _model_id = None
+        if data.model_aliases is not None and isinstance(data.model_aliases, dict):
+            litellm_modeltable = LiteLLM_ModelTable(
+                model_aliases=json.dumps(data.model_aliases),
+                created_by=user_api_key_dict.user_id or litellm_proxy_admin_name,
+                updated_by=user_api_key_dict.user_id or litellm_proxy_admin_name,
+            )
+            model_dict = await prisma_client.db.litellm_modeltable.create(
+                {**litellm_modeltable.json(exclude_none=True)}  # type: ignore
+            )  # type: ignore
+
+            _model_id = model_dict.id
+
+        ## ADD TO TEAM TABLE
+        complete_team_data = LiteLLM_TeamTable(
+            **data.json(),
+            model_id=_model_id,
+        )
+
+        # Set Management Endpoint Metadata Fields
+        for field in LiteLLM_ManagementEndpoint_MetadataFields_Premium:
+            if getattr(data, field) is not None:
+                _set_team_metadata_field(
+                    team_data=complete_team_data,
+                    field_name=field,
+                    value=getattr(data, field),
+                )
+
+        # If budget_duration is set, set `budget_reset_at`
+        if complete_team_data.budget_duration is not None:
+            duration_s = duration_in_seconds(
+                duration=complete_team_data.budget_duration
+            )
+            reset_at = datetime.now(timezone.utc) + timedelta(seconds=duration_s)
+            complete_team_data.budget_reset_at = reset_at
+
+        complete_team_data_dict = complete_team_data.model_dump(exclude_none=True)
+        complete_team_data_dict = prisma_client.jsonify_team_object(
+            db_data=complete_team_data_dict
+        )
+        team_row: LiteLLM_TeamTable = await prisma_client.db.litellm_teamtable.create(
+            data=complete_team_data_dict,
+            include={"litellm_model_table": True},  # type: ignore
+        )
+
+        ## ADD TEAM ID TO USER TABLE ##
+        for user in complete_team_data.members_with_roles:
+            ## add team id to user row ##
+            await prisma_client.update_data(
+                user_id=user.user_id,
+                data={"user_id": user.user_id, "teams": [team_row.team_id]},
+                update_key_values_custom_query={
+                    "teams": {
+                        "push ": [team_row.team_id],
+                    }
                 },
             )
 
-        if (
-            data.max_budget is not None
-            and user_api_key_dict.max_budget is not None
-            and data.max_budget > user_api_key_dict.max_budget
-        ):
-            raise HTTPException(
-                status_code=400,
-                detail={
-                    "error": f"max budget higher than user max. User max budget={user_api_key_dict.max_budget}. User role={user_api_key_dict.user_role}"
-                },
-            )
+        # Enterprise Feature - Audit Logging. Enable with litellm.store_audit_logs = True
+        if litellm.store_audit_logs is True:
+            _updated_values = complete_team_data.json(exclude_none=True)
 
-        if data.models is not None and len(user_api_key_dict.models) > 0:
-            for m in data.models:
-                if m not in user_api_key_dict.models:
-                    raise HTTPException(
-                        status_code=400,
-                        detail={
-                            "error": f"Model not in allowed user models. User allowed models={user_api_key_dict.models}. User id={user_api_key_dict.user_id}"
-                        },
+            _updated_values = json.dumps(_updated_values, default=str)
+
+            asyncio.create_task(
+                create_audit_log_for_update(
+                    request_data=LiteLLM_AuditLogs(
+                        id=str(uuid.uuid4()),
+                        updated_at=datetime.now(timezone.utc),
+                        changed_by=litellm_changed_by
+                        or user_api_key_dict.user_id
+                        or litellm_proxy_admin_name,
+                        changed_by_api_key=user_api_key_dict.api_key,
+                        table_name=LitellmTableNames.TEAM_TABLE_NAME,
+                        object_id=data.team_id,
+                        action="created",
+                        updated_values=_updated_values,
+                        before_value=None,
                     )
-
-    if user_api_key_dict.user_id is not None:
-        creating_user_in_list = False
-        for member in data.members_with_roles:
-            if member.user_id == user_api_key_dict.user_id:
-                creating_user_in_list = True
-
-        if creating_user_in_list is False:
-            data.members_with_roles.append(
-                Member(role="admin", user_id=user_api_key_dict.user_id)
-            )
-
-    ## ADD TO MODEL TABLE
-    _model_id = None
-    if data.model_aliases is not None and isinstance(data.model_aliases, dict):
-        litellm_modeltable = LiteLLM_ModelTable(
-            model_aliases=json.dumps(data.model_aliases),
-            created_by=user_api_key_dict.user_id or litellm_proxy_admin_name,
-            updated_by=user_api_key_dict.user_id or litellm_proxy_admin_name,
-        )
-        model_dict = await prisma_client.db.litellm_modeltable.create(
-            {**litellm_modeltable.json(exclude_none=True)}  # type: ignore
-        )  # type: ignore
-
-        _model_id = model_dict.id
-
-    ## ADD TO TEAM TABLE
-    complete_team_data = LiteLLM_TeamTable(
-        **data.json(),
-        model_id=_model_id,
-    )
-
-    # Set Management Endpoint Metadata Fields
-    for field in LiteLLM_ManagementEndpoint_MetadataFields_Premium:
-        if getattr(data, field) is not None:
-            _set_team_metadata_field(
-                team_data=complete_team_data,
-                field_name=field,
-                value=getattr(data, field),
-            )
-
-    # If budget_duration is set, set `budget_reset_at`
-    if complete_team_data.budget_duration is not None:
-        duration_s = duration_in_seconds(duration=complete_team_data.budget_duration)
-        reset_at = datetime.now(timezone.utc) + timedelta(seconds=duration_s)
-        complete_team_data.budget_reset_at = reset_at
-
-    complete_team_data_dict = complete_team_data.model_dump(exclude_none=True)
-    complete_team_data_dict = prisma_client.jsonify_team_object(
-        db_data=complete_team_data_dict
-    )
-    team_row: LiteLLM_TeamTable = await prisma_client.db.litellm_teamtable.create(
-        data=complete_team_data_dict,
-        include={"litellm_model_table": True},  # type: ignore
-    )
-
-    ## ADD TEAM ID TO USER TABLE ##
-    for user in complete_team_data.members_with_roles:
-        ## add team id to user row ##
-        await prisma_client.update_data(
-            user_id=user.user_id,
-            data={"user_id": user.user_id, "teams": [team_row.team_id]},
-            update_key_values_custom_query={
-                "teams": {
-                    "push ": [team_row.team_id],
-                }
-            },
-        )
-
-    # Enterprise Feature - Audit Logging. Enable with litellm.store_audit_logs = True
-    if litellm.store_audit_logs is True:
-        _updated_values = complete_team_data.json(exclude_none=True)
-
-        _updated_values = json.dumps(_updated_values, default=str)
-
-        asyncio.create_task(
-            create_audit_log_for_update(
-                request_data=LiteLLM_AuditLogs(
-                    id=str(uuid.uuid4()),
-                    updated_at=datetime.now(timezone.utc),
-                    changed_by=litellm_changed_by
-                    or user_api_key_dict.user_id
-                    or litellm_proxy_admin_name,
-                    changed_by_api_key=user_api_key_dict.api_key,
-                    table_name=LitellmTableNames.TEAM_TABLE_NAME,
-                    object_id=data.team_id,
-                    action="created",
-                    updated_values=_updated_values,
-                    before_value=None,
                 )
             )
-        )
 
-    try:
-        return team_row.model_dump()
-    except Exception:
-        return team_row.dict()
+        try:
+            return team_row.model_dump()
+        except Exception:
+            return team_row.dict()
+    except Exception as e:
+        raise handle_exception_on_proxy(e)
 
 
 async def _update_model_table(
diff --git a/litellm/proxy/proxy_config.yaml b/litellm/proxy/proxy_config.yaml
index cf93bd679b..791dac4e8c 100644
--- a/litellm/proxy/proxy_config.yaml
+++ b/litellm/proxy/proxy_config.yaml
@@ -24,5 +24,3 @@ guardrails:
       mode: "during_call"
       guardrailIdentifier: gf3sc1mzinjw
       guardrailVersion: "DRAFT"
-      default_on: true
-
diff --git a/tests/otel_tests/test_guardrails.py b/tests/otel_tests/test_guardrails.py
index 12d9d1c384..e386d5151e 100644
--- a/tests/otel_tests/test_guardrails.py
+++ b/tests/otel_tests/test_guardrails.py
@@ -3,6 +3,7 @@ import asyncio
 import aiohttp, openai
 from openai import OpenAI, AsyncOpenAI
 from typing import Optional, List, Union
+import json
 import uuid
 
 
@@ -40,21 +41,22 @@ async def chat_completion(
             raise Exception(response_text)
 
         # response headers
-        response_headers = response.headers
+        response_headers = dict(response.headers)
         print("response headers=", response_headers)
 
         return await response.json(), response_headers
 
 
-async def generate_key(session, guardrails):
+async def generate_key(
+    session, guardrails: Optional[List] = None, team_id: Optional[str] = None
+):
     url = "http://0.0.0.0:4000/key/generate"
     headers = {"Authorization": "Bearer sk-1234", "Content-Type": "application/json"}
+    data = {}
     if guardrails:
-        data = {
-            "guardrails": guardrails,
-        }
-    else:
-        data = {}
+        data["guardrails"] = guardrails
+    if team_id:
+        data["team_id"] = team_id
 
     async with session.post(url, headers=headers, json=data) as response:
         status = response.status
@@ -148,7 +150,6 @@ async def test_no_llm_guard_triggered():
 
 
 @pytest.mark.asyncio
-@pytest.mark.skip(reason="Aporia account disabled")
 async def test_guardrails_with_api_key_controls():
     """
     - Make two API Keys
@@ -161,8 +162,7 @@ async def test_guardrails_with_api_key_controls():
         key_with_guardrails = await generate_key(
             session=session,
             guardrails=[
-                "aporia-post-guard",
-                "aporia-pre-guard",
+                "bedrock-pre-guard",
             ],
         )
 
@@ -185,19 +185,15 @@ async def test_guardrails_with_api_key_controls():
         assert "x-litellm-applied-guardrails" not in headers
 
         # test guardrails triggered for key with guardrails
-        try:
-            response, headers = await chat_completion(
-                session,
-                key_with_guardrails,
-                model="fake-openai-endpoint",
-                messages=[
-                    {"role": "user", "content": f"Hello my name is ishaan@berri.ai"}
-                ],
-            )
-            pytest.fail("Should have thrown an exception")
-        except Exception as e:
-            print(e)
-            assert "Aporia detected and blocked PII" in str(e)
+        response, headers = await chat_completion(
+            session,
+            key_with_guardrails,
+            model="fake-openai-endpoint",
+            messages=[{"role": "user", "content": f"Hello my name is ishaan@berri.ai"}],
+        )
+
+        assert "x-litellm-applied-guardrails" in headers
+        assert headers["x-litellm-applied-guardrails"] == "bedrock-pre-guard"
 
 
 @pytest.mark.asyncio
@@ -241,3 +237,82 @@ async def test_custom_guardrail_during_call_triggered():
         except Exception as e:
             print(e)
             assert "Guardrail failed words - `litellm` detected" in str(e)
+
+
+async def create_team(session, guardrails: Optional[List] = None):
+    url = "http://0.0.0.0:4000/team/new"
+    headers = {"Authorization": "Bearer sk-1234", "Content-Type": "application/json"}
+    data = {"guardrails": guardrails}
+
+    print("request data=", data)
+
+    async with session.post(url, headers=headers, json=data) as response:
+        status = response.status
+        response_text = await response.text()
+
+        print(response_text)
+        print()
+
+        if status != 200:
+            raise Exception(f"Request did not return a 200 status code: {status}")
+
+        return await response.json()
+
+
+@pytest.mark.asyncio
+async def test_guardrails_with_team_controls():
+    """
+    - Create a team with guardrails
+    - Make two API Keys
+        - Key 1 not associated with team
+        - Key 2 associated with team (inherits team guardrails)
+    - Request with Key 1 -> should be success with no guardrails
+    - Request with Key 2 -> should error since team guardrails are triggered
+    """
+    async with aiohttp.ClientSession() as session:
+
+        # Create team with guardrails
+        team = await create_team(
+            session=session,
+            guardrails=[
+                "bedrock-pre-guard",
+            ],
+        )
+
+        print("team=", team)
+
+        team_id = team["team_id"]
+
+        # Create key with team association
+        key_with_team = await generate_key(session=session, team_id=team_id)
+        key_with_team = key_with_team["key"]
+
+        # Create key without team
+        key_without_team = await generate_key(
+            session=session,
+        )
+        key_without_team = key_without_team["key"]
+
+        # Test no guardrails triggered for key without a team
+        response, headers = await chat_completion(
+            session,
+            key_without_team,
+            model="fake-openai-endpoint",
+            messages=[{"role": "user", "content": "Hello my name is ishaan@berri.ai"}],
+        )
+        await asyncio.sleep(3)
+
+        print("response=", response, "response headers", headers)
+        assert "x-litellm-applied-guardrails" not in headers
+
+        response, headers = await chat_completion(
+            session,
+            key_with_team,
+            model="fake-openai-endpoint",
+            messages=[{"role": "user", "content": "Hello my name is ishaan@berri.ai"}],
+        )
+
+        print("response headers=", json.dumps(headers, indent=4))
+
+        assert "x-litellm-applied-guardrails" in headers
+        assert headers["x-litellm-applied-guardrails"] == "bedrock-pre-guard"