diff --git a/CHANGELOG.md b/CHANGELOG.md
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,3 +1,7 @@
+# 1.8.1
+
+- In case of exceptions thrown by user from inside of Session, the connection status gets checked to be out of transaction and unless it is the connection gets reset.
+
 # 1.8
 
 - Move to "iproute" from "network-ip" for the "inet" datatype (#163).
diff --git a/hasql.cabal b/hasql.cabal
--- a/hasql.cabal
+++ b/hasql.cabal
@@ -1,6 +1,6 @@
 cabal-version: 3.0
 name: hasql
-version: 1.8.1
+version: 1.8.1.1
 category: Hasql, Database, PostgreSQL
 synopsis: Fast PostgreSQL driver with a flexible mapping API
 description:
diff --git a/library/Hasql/PreparedStatementRegistry.hs b/library/Hasql/PreparedStatementRegistry.hs
--- a/library/Hasql/PreparedStatementRegistry.hs
+++ b/library/Hasql/PreparedStatementRegistry.hs
@@ -2,6 +2,7 @@
   ( PreparedStatementRegistry,
     new,
     update,
+    reset,
     LocalKey (..),
   )
 where
@@ -9,7 +10,7 @@
 import ByteString.StrictBuilder qualified as B
 import Data.HashTable.IO qualified as A
 import Hasql.LibPq14 qualified as Pq
-import Hasql.Prelude hiding (lookup)
+import Hasql.Prelude hiding (lookup, reset)
 
 data PreparedStatementRegistry
   = PreparedStatementRegistry !(A.BasicHashTable LocalKey ByteString) !(IORef Word)
@@ -41,6 +42,15 @@
               B.builderBytes . B.asciiIntegral $ n
     old =
       onOldRemoteKey
+
+reset :: PreparedStatementRegistry -> IO ()
+reset (PreparedStatementRegistry table counter) = do
+  -- TODO: This is a temporary measure.
+  -- We should just move to a pure implementation.
+  do
+    entries <- A.toList table
+    forM_ entries \(k, _) -> A.delete table k
+  writeIORef counter 0
 
 -- |
 -- Local statement key.
diff --git a/library/Hasql/Session/Core.hs b/library/Hasql/Session/Core.hs
--- a/library/Hasql/Session/Core.hs
+++ b/library/Hasql/Session/Core.hs
@@ -11,6 +11,7 @@
 import Hasql.LibPq14 qualified as Pq
 import Hasql.Pipeline.Core qualified as Pipeline
 import Hasql.Prelude
+import Hasql.PreparedStatementRegistry qualified as PreparedStatementRegistry
 import Hasql.Statement qualified as Statement
 
 -- |
@@ -23,20 +24,19 @@
 -- Executes a bunch of commands on the provided connection.
 run :: Session a -> Connection.Connection -> IO (Either SessionError a)
 run (Session impl) connection =
-  handle @SomeException onExc
-    $ runExceptT
-    $ runReaderT impl connection
+  mask $ \restore -> onException (restore main) handler
   where
-    onExc exc =
+    main =
+      runExceptT $ runReaderT impl connection
+    handler =
       case connection of
-        Connection.Connection pqConnVar _ _ ->
-          withMVar pqConnVar onPqConn
-      where
-        onPqConn pqConn = do
-          Pq.transactionStatus pqConn >>= \case
-            Pq.TransIdle -> pure ()
-            _ -> Pq.reset pqConn
-          throwIO exc
+        Connection.Connection pqConnVar _ registry ->
+          withMVar pqConnVar \pqConn ->
+            Pq.transactionStatus pqConn >>= \case
+              Pq.TransIdle -> pure ()
+              _ -> do
+                PreparedStatementRegistry.reset registry
+                Pq.reset pqConn
 
 -- |
 -- Possibly a multi-statement query,