An information handling system includes first and second power supplies, a chassis BMC, and a sled. The power supplies each assert a power good indication when the power supply is providing power on a power rail. The chassis BMC receives the power good indications and asserts a loss of redundancy indication when one of the power good indications is deasserted. The sled includes a sled BMC and a host processing system. The sled receives the loss of redundancy indication and in response, asserts a processor over temperature indication to the host processing system. When both power good indications are asserted, the chassis BMC directs the sled BMC to operate the host processing system in accordance with a normal operation sled current limit. When one of the power good indications is deasserted, the chassis BMC directs the sled BMC to operate the host processing system in accordance with a reduced power operation sled current limit. The reduced power operation sled current limit is a lower limit than the normal operation sled current limit.