diff --git a/charts/ctrlplane/Chart.lock b/charts/ctrlplane/Chart.lock
index 63ada8a..30908cf 100644
--- a/charts/ctrlplane/Chart.lock
+++ b/charts/ctrlplane/Chart.lock
@@ -4,7 +4,7 @@ dependencies:
   version: 0.1.6
 - name: otel
   repository: file://charts/otel
-  version: 0.2.1
+  version: 0.2.2
 - name: wandb-base
   repository: https://charts.wandb.ai
   version: 0.11.11
@@ -14,5 +14,5 @@ dependencies:
 - name: wandb-base
   repository: https://charts.wandb.ai
   version: 0.11.11
-digest: sha256:03b431cdd1b20c20d969b0eacb90e33dec92599d877dde63f801f2fa926b8d86
-generated: "2026-05-04T13:22:49.464936-04:00"
+digest: sha256:f1eac868446cb9d10c2be8327207e72acda8c5136350a5a4b271463b25cc348b
+generated: "2026-05-08T15:38:09.858607-05:00"
diff --git a/charts/ctrlplane/Chart.yaml b/charts/ctrlplane/Chart.yaml
index c1bb90b..f0e86bd 100644
--- a/charts/ctrlplane/Chart.yaml
+++ b/charts/ctrlplane/Chart.yaml
@@ -2,7 +2,7 @@ apiVersion: v2
 name: ctrlplane
 description: Ctrlplane Helm chart for Kubernetes
 type: application
-version: 1.1.2
+version: 1.1.3
 appVersion: 1.0.0
 
 maintainers:
diff --git a/charts/ctrlplane/charts/otel/Chart.yaml b/charts/ctrlplane/charts/otel/Chart.yaml
index 69f0d48..26bd6ed 100644
--- a/charts/ctrlplane/charts/otel/Chart.yaml
+++ b/charts/ctrlplane/charts/otel/Chart.yaml
@@ -3,5 +3,5 @@ name: otel
 type: application
 description: A Helm chart for Kubernetes
 
-version: 0.2.1
+version: 0.2.2
 appVersion: "0.109.0"
diff --git a/charts/ctrlplane/charts/otel/templates/service.yaml b/charts/ctrlplane/charts/otel/templates/service.yaml
index 7e58ce3..72633b0 100644
--- a/charts/ctrlplane/charts/otel/templates/service.yaml
+++ b/charts/ctrlplane/charts/otel/templates/service.yaml
@@ -18,6 +18,9 @@ metadata:
     {{- end }}
 spec:
   type: {{ .Values.service.type }}
+  {{- if eq (default "DaemonSet" .Values.workload.kind) "DaemonSet" }}
+  internalTrafficPolicy: Local
+  {{- end }}
   ports:
     - port: 9109
       protocol: TCP
diff --git a/charts/ctrlplane/tests/otel_internal_traffic_policy_test.yaml b/charts/ctrlplane/tests/otel_internal_traffic_policy_test.yaml
new file mode 100644
index 0000000..545cae2
--- /dev/null
+++ b/charts/ctrlplane/tests/otel_internal_traffic_policy_test.yaml
@@ -0,0 +1,31 @@
+suite: otel service internalTrafficPolicy is set for DaemonSet only
+templates:
+  - charts/otel/templates/service.yaml
+release:
+  name: ctrlplane
+
+tests:
+  - it: service has internalTrafficPolicy=Local in default (DaemonSet) mode
+    asserts:
+      - equal:
+          path: spec.internalTrafficPolicy
+          value: Local
+
+  - it: service has internalTrafficPolicy=Local when workload.kind is set explicitly to DaemonSet
+    set:
+      otel:
+        workload:
+          kind: DaemonSet
+    asserts:
+      - equal:
+          path: spec.internalTrafficPolicy
+          value: Local
+
+  - it: service does NOT set internalTrafficPolicy when workload.kind is Deployment
+    set:
+      otel:
+        workload:
+          kind: Deployment
+    asserts:
+      - notExists:
+          path: spec.internalTrafficPolicy