diff --git a/compiler/ir/ir.psi2ir/src/org/jetbrains/kotlin/psi2ir/generators/LoopExpressionGenerator.kt b/compiler/ir/ir.psi2ir/src/org/jetbrains/kotlin/psi2ir/generators/LoopExpressionGenerator.kt
index 0337ac67023..542787d2821 100644
--- a/compiler/ir/ir.psi2ir/src/org/jetbrains/kotlin/psi2ir/generators/LoopExpressionGenerator.kt
+++ b/compiler/ir/ir.psi2ir/src/org/jetbrains/kotlin/psi2ir/generators/LoopExpressionGenerator.kt
@@ -47,14 +47,18 @@ class LoopExpressionGenerator(statementGenerator: StatementGenerator) : Statemen
     }
 
     fun generateBreak(ktBreak: KtBreakExpression): IrExpression {
-        val parentLoop = findParentLoop(ktBreak)
+        val parentLoop = findParentLoop(ktBreak) ?:
+                         return ErrorExpressionGenerator(statementGenerator).generateErrorExpression(
+                                 ktBreak, RuntimeException("Loop not found for break expression: ${ktBreak.text}"))
         return IrBreakImpl(ktBreak.startOffset, ktBreak.endOffset, context.builtIns.nothingType, parentLoop).apply {
             label = ktBreak.getLabelName()
         }
     }
 
     fun generateContinue(ktContinue: KtContinueExpression): IrExpression {
-        val parentLoop = findParentLoop(ktContinue)
+        val parentLoop = findParentLoop(ktContinue) ?:
+                         return ErrorExpressionGenerator(statementGenerator).generateErrorExpression(
+                                 ktContinue, RuntimeException("Loop not found for continue expression: ${ktContinue.text}"))
         return IrContinueImpl(ktContinue.startOffset, ktContinue.endOffset, context.builtIns.nothingType, parentLoop).apply {
             label = ktContinue.getLabelName()
         }
@@ -63,10 +67,10 @@ class LoopExpressionGenerator(statementGenerator: StatementGenerator) : Statemen
     private fun getLoopLabel(ktLoop: KtLoopExpression): String? =
             (ktLoop.parent as? KtLabeledExpression)?.getLabelName()
 
-    private fun findParentLoop(ktWithLabel: KtExpressionWithLabel): IrLoop =
+    private fun findParentLoop(ktWithLabel: KtExpressionWithLabel): IrLoop? =
             findParentLoop(ktWithLabel, ktWithLabel.getLabelName())
 
-    private fun findParentLoop(ktExpression: KtExpression, targetLabel: String?): IrLoop {
+    private fun findParentLoop(ktExpression: KtExpression, targetLabel: String?): IrLoop? {
         var finger: KtExpression? = ktExpression
         while (finger != null) {
             finger = finger.getParentOfType<KtLoopExpression>(true)
@@ -86,7 +90,7 @@ class LoopExpressionGenerator(statementGenerator: StatementGenerator) : Statemen
                 }
             }
         }
-        throw AssertionError("No parent loop for break/continue @$targetLabel")
+        return null
     }
 
     private fun getLoop(ktLoop: KtLoopExpression): IrLoop? {
diff --git a/compiler/testData/ir/irText/expressions/badBreakContinue.kt b/compiler/testData/ir/irText/expressions/badBreakContinue.kt
new file mode 100644
index 00000000000..3acd6e2f7db
--- /dev/null
+++ b/compiler/testData/ir/irText/expressions/badBreakContinue.kt
@@ -0,0 +1,27 @@
+// !IGNORE_ERRORS
+
+fun test1() {
+    break
+    continue
+}
+
+fun test2() {
+    L1@ while (true) {
+        break@ERROR
+        continue@ERROR
+    }
+}
+
+fun test3() {
+    L1@ while (true) {
+        val lambda = {
+            break@L1
+            continue@L1
+        }
+    }
+}
+
+fun test4() {
+    while (break) {}
+    while (continue) {}
+}
\ No newline at end of file
diff --git a/compiler/testData/ir/irText/expressions/badBreakContinue.txt b/compiler/testData/ir/irText/expressions/badBreakContinue.txt
new file mode 100644
index 00000000000..2cca79ec9a1
--- /dev/null
+++ b/compiler/testData/ir/irText/expressions/badBreakContinue.txt
@@ -0,0 +1,32 @@
+FILE /badBreakContinue.kt
+  FUN public fun test1(): kotlin.Unit
+    BLOCK_BODY
+      ERROR_EXPR 'Loop not found for break expression: break' type=kotlin.Nothing
+      ERROR_EXPR 'Loop not found for continue expression: continue' type=kotlin.Nothing
+  FUN public fun test2(): kotlin.Unit
+    BLOCK_BODY
+      WHILE label=L1 operator=WHILE_LOOP
+        condition: CONST Boolean type=kotlin.Boolean value='true'
+        body: BLOCK type=kotlin.Nothing operator=null
+          ERROR_EXPR 'Loop not found for break expression: break@ERROR' type=kotlin.Nothing
+          ERROR_EXPR 'Loop not found for continue expression: continue@ERROR' type=kotlin.Nothing
+  FUN public fun test3(): kotlin.Unit
+    BLOCK_BODY
+      WHILE label=L1 operator=WHILE_LOOP
+        condition: CONST Boolean type=kotlin.Boolean value='true'
+        body: BLOCK type=kotlin.Unit operator=null
+          VAR val lambda: () -> kotlin.Nothing
+            BLOCK type=() -> kotlin.Nothing operator=LAMBDA
+              FUN local final fun <anonymous>(): kotlin.Nothing
+                BLOCK_BODY
+                  ERROR_EXPR 'Loop not found for break expression: break@L1' type=kotlin.Nothing
+                  ERROR_EXPR 'Loop not found for continue expression: continue@L1' type=kotlin.Nothing
+              CALLABLE_REFERENCE '<anonymous>(): Nothing' type=() -> kotlin.Nothing operator=LAMBDA
+  FUN public fun test4(): kotlin.Unit
+    BLOCK_BODY
+      WHILE label=null operator=WHILE_LOOP
+        condition: ERROR_EXPR 'Loop not found for break expression: break' type=kotlin.Nothing
+        body: BLOCK type=kotlin.Unit operator=null
+      WHILE label=null operator=WHILE_LOOP
+        condition: ERROR_EXPR 'Loop not found for continue expression: continue' type=kotlin.Nothing
+        body: BLOCK type=kotlin.Unit operator=null
diff --git a/compiler/tests/org/jetbrains/kotlin/ir/IrTextTestCaseGenerated.java b/compiler/tests/org/jetbrains/kotlin/ir/IrTextTestCaseGenerated.java
index 0ca3ac8ffa3..cf7c49ae70f 100644
--- a/compiler/tests/org/jetbrains/kotlin/ir/IrTextTestCaseGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/ir/IrTextTestCaseGenerated.java
@@ -280,6 +280,12 @@ public class IrTextTestCaseGenerated extends AbstractIrTextTestCase {
             doTest(fileName);
         }
 
+        @TestMetadata("badBreakContinue.kt")
+        public void testBadBreakContinue() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/ir/irText/expressions/badBreakContinue.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("bangbang.kt")
         public void testBangbang() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/ir/irText/expressions/bangbang.kt");