diff --git a/pkg/services/libraryelements/api.go b/pkg/services/libraryelements/api.go
index 5bb3a03612a..d3113c48526 100644
--- a/pkg/services/libraryelements/api.go
+++ b/pkg/services/libraryelements/api.go
@@ -63,6 +63,8 @@ func (l *LibraryElementService) createHandler(c *contextmodel.ReqContext) respon
 	if cmd.FolderUID != nil {
 		if *cmd.FolderUID == "" {
 			cmd.FolderID = 0
+			generalFolderUID := ac.GeneralFolderUID
+			cmd.FolderUID = &generalFolderUID
 		} else {
 			folder, err := l.folderService.Get(c.Req.Context(), &folder.GetFolderQuery{OrgID: c.SignedInUser.GetOrgID(), UID: cmd.FolderUID, SignedInUser: c.SignedInUser})
 			if err != nil || folder == nil {
diff --git a/public/app/features/library-panels/components/AddLibraryPanelModal/AddLibraryPanelModal.tsx b/public/app/features/library-panels/components/AddLibraryPanelModal/AddLibraryPanelModal.tsx
index a982f9e7342..d4b9f8db378 100644
--- a/public/app/features/library-panels/components/AddLibraryPanelModal/AddLibraryPanelModal.tsx
+++ b/public/app/features/library-panels/components/AddLibraryPanelModal/AddLibraryPanelModal.tsx
@@ -1,13 +1,14 @@
 import React, { useCallback, useEffect, useState } from 'react';
 import { useAsync, useDebounce } from 'react-use';
 
-import { isFetchError } from '@grafana/runtime';
+import { FetchError, isFetchError } from '@grafana/runtime';
 import { Button, Field, Input, Modal } from '@grafana/ui';
 import { OldFolderPicker } from 'app/core/components/Select/OldFolderPicker';
 import { t, Trans } from 'app/core/internationalization';
 
 import { PanelModel } from '../../../dashboard/state';
 import { getLibraryPanelByName } from '../../state/api';
+import { LibraryElementDTO } from '../../types';
 import { usePanelSave } from '../../utils/usePanelSave';
 
 interface AddLibraryPanelContentsProps {
@@ -28,9 +29,11 @@ export const AddLibraryPanelContents = ({ panel, initialFolderUid, onDismiss }:
   const { saveLibraryPanel } = usePanelSave();
   const onCreate = useCallback(() => {
     panel.libraryPanel = { uid: '', name: panelName };
-    saveLibraryPanel(panel, folderUid!).then((res) => {
-      if (!(res instanceof Error)) {
+    saveLibraryPanel(panel, folderUid!).then((res: LibraryElementDTO | FetchError) => {
+      if (!isFetchError(res)) {
         onDismiss();
+      } else {
+        panel.libraryPanel = undefined;
       }
     });
   }, [panel, panelName, folderUid, onDismiss, saveLibraryPanel]);