diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1f7f9d7113..3dc8b84d4c 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -20,6 +20,7 @@ _Development cycle in progress — entries are added as work merges into `releas
 ### 🔧 Bug Fixes
 
 - **fix(dashboard):** keep no-auth providers (opencode, duckduckgo-web, theoldllm, veoaifree-web) visible under the "Show configured only" filter — they never create a connection row (`stats.total === 0`) but are always usable and already appear in `/v1/models`, so the filter now treats `displayAuthType === "no-auth"` as configured. (#3290 — thanks @uniQta)
+- **fix(cli):** `omniroute update` no longer always fails on a global install — `getCurrentVersion()` and `createBackup()` now resolve `package.json`/`bin` relative to the script (`import.meta.url`) instead of `process.cwd()` (the user's working dir on a global npm/brew install → *"Could not determine current version"*), and the backup copies the `cli` directory with `cpSync({recursive:true})` instead of `copyFileSync`, which threw a swallowed `EISDIR` → *"Failed to create backup. Aborting"*. (#3295 — thanks @uniQta)
 - **fix(sse):** harden the passthrough stream against empty upstream responses — emit a synthetic retry chunk on an empty `choices: []` (fixes a Copilot Chat crash) and log empty post-`tool_calls` completions; also registers **MiniMax M3** (1M context) across 8 provider tiers. ([#3297](https://github.com/diegosouzapw/OmniRoute/pull/3297), #3110 — thanks @wilsonicdev)
 - **fix(opencode-provider):** extract `contextLength` from the live `/v1/models` catalog (live > `modelContextLengths` > static map) so passthrough models outside the legacy 8-model map no longer silently truncate to OpenCode's 128K default. ([#3298](https://github.com/diegosouzapw/OmniRoute/pull/3298) — thanks @herjarsa / @diegosouzapw)
 - **fix(dev):** auto-rebuild `better-sqlite3` on a Node ABI mismatch at `npm run dev` startup (nvm 22↔24) — dev-only, no-op on the healthy path, unrelated errors not swallowed. ([#3301](https://github.com/diegosouzapw/OmniRoute/pull/3301) — thanks @zhiru)
diff --git a/bin/cli/commands/update.mjs b/bin/cli/commands/update.mjs
index 5fe56e8c49..e3c95cfd81 100644
--- a/bin/cli/commands/update.mjs
+++ b/bin/cli/commands/update.mjs
@@ -1,16 +1,24 @@
 import { printHeading, printInfo, printSuccess, printError } from "../io.mjs";
 import { homedir } from "node:os";
 import path from "node:path";
+import { fileURLToPath } from "node:url";
 import { execFile } from "node:child_process";
 import { promisify } from "node:util";
 import { t } from "../i18n.mjs";
 
 const execFileAsync = promisify(execFile);
 
-async function getCurrentVersion() {
+// This file lives at <pkgRoot>/bin/cli/commands/update.mjs — resolve package
+// paths relative to the script, NOT process.cwd(). On a global npm/brew install
+// the user's cwd is not the package root, so cwd-relative lookups break (#3295).
+const SCRIPT_DIR = path.dirname(fileURLToPath(import.meta.url));
+const PKG_ROOT = path.resolve(SCRIPT_DIR, "..", "..", "..");
+const BIN_DIR = path.join(PKG_ROOT, "bin");
+
+export async function getCurrentVersion() {
   try {
     const { readFileSync } = await import("node:fs");
-    const pkg = JSON.parse(readFileSync(path.join(process.cwd(), "package.json"), "utf-8"));
+    const pkg = JSON.parse(readFileSync(path.join(PKG_ROOT, "package.json"), "utf-8"));
     return pkg.version;
   } catch {
     return null;
@@ -38,12 +46,12 @@ function compareVersions(a, b) {
   return 0;
 }
 
-async function createBackup() {
-  const binPath = path.join(process.cwd(), "bin");
+export async function createBackup() {
+  const binPath = BIN_DIR;
   const backupDir = path.join(homedir(), ".omniroute", "backups", `omniroute-${Date.now()}`);
 
   try {
-    const { mkdirSync, copyFileSync, existsSync } = await import("node:fs");
+    const { mkdirSync, cpSync, existsSync } = await import("node:fs");
     if (!existsSync(binPath)) return null;
 
     mkdirSync(backupDir, { recursive: true });
@@ -51,7 +59,9 @@ async function createBackup() {
     for (const f of files) {
       const src = path.join(binPath, f);
       if (existsSync(src)) {
-        copyFileSync(src, path.join(backupDir, f));
+        // cpSync handles both files and directories; the old copyFileSync threw
+        // EISDIR on the "cli" directory, which was swallowed by the catch (#3295).
+        cpSync(src, path.join(backupDir, f), { recursive: true });
       }
     }
     return backupDir;
diff --git a/tests/unit/cli-update-global-paths-3295.test.ts b/tests/unit/cli-update-global-paths-3295.test.ts
new file mode 100644
index 0000000000..e23a2ef3dd
--- /dev/null
+++ b/tests/unit/cli-update-global-paths-3295.test.ts
@@ -0,0 +1,65 @@
+import test from "node:test";
+import assert from "node:assert/strict";
+import { readFileSync, mkdtempSync, mkdirSync, existsSync, statSync, rmSync } from "node:fs";
+import { tmpdir } from "node:os";
+import path from "node:path";
+import { fileURLToPath } from "node:url";
+
+const update = await import("../../bin/cli/commands/update.mjs");
+
+const REPO_ROOT = path.resolve(path.dirname(fileURLToPath(import.meta.url)), "..", "..");
+const REAL_VERSION = JSON.parse(
+  readFileSync(path.join(REPO_ROOT, "package.json"), "utf-8")
+).version;
+
+// #3295 issue 1: getCurrentVersion() must resolve package.json relative to the
+// script, not process.cwd(). When OmniRoute is installed globally, the user's
+// cwd is not the package root, so a cwd-relative lookup returns null →
+// "Could not determine current version".
+test("getCurrentVersion resolves the real version from a foreign cwd (#3295)", async () => {
+  const originalCwd = process.cwd();
+  const foreignCwd = mkdtempSync(path.join(tmpdir(), "omniroute-cwd-"));
+  try {
+    process.chdir(foreignCwd); // no package.json here → cwd-relative lookup would fail
+    const version = await update.getCurrentVersion();
+    assert.equal(version, REAL_VERSION);
+  } finally {
+    process.chdir(originalCwd);
+    rmSync(foreignCwd, { recursive: true, force: true });
+  }
+});
+
+// #3295 issue 2: createBackup() must (a) resolve bin/ relative to the script,
+// and (b) copy the "cli" directory recursively. The old copyFileSync(dir) threw
+// EISDIR which the outer catch swallowed → "Failed to create backup. Aborting".
+test("createBackup resolves bin/ from a foreign cwd and copies cli/ recursively (#3295)", async () => {
+  const originalCwd = process.cwd();
+  const originalHome = process.env.HOME;
+  const foreignCwd = mkdtempSync(path.join(tmpdir(), "omniroute-cwd-"));
+  const fakeHome = mkdtempSync(path.join(tmpdir(), "omniroute-home-"));
+  try {
+    process.chdir(foreignCwd); // no bin/ here → cwd-relative binPath would be missing
+    process.env.HOME = fakeHome; // redirect ~/.omniroute/backups
+    mkdirSync(fakeHome, { recursive: true });
+
+    const backupDir = await update.createBackup();
+
+    assert.ok(backupDir, "createBackup must return a path (not null)");
+    // omniroute.mjs is a real file in bin/ and must be copied
+    assert.ok(existsSync(path.join(backupDir, "omniroute.mjs")), "omniroute.mjs copied");
+    // "cli" is a directory — it must be copied recursively, not throw EISDIR
+    const cliBackup = path.join(backupDir, "cli");
+    assert.ok(existsSync(cliBackup), "cli/ directory copied");
+    assert.ok(statSync(cliBackup).isDirectory(), "cli/ backup is a directory");
+    assert.ok(
+      existsSync(path.join(cliBackup, "commands")),
+      "cli/ contents copied recursively"
+    );
+  } finally {
+    process.chdir(originalCwd);
+    if (originalHome === undefined) delete process.env.HOME;
+    else process.env.HOME = originalHome;
+    rmSync(foreignCwd, { recursive: true, force: true });
+    rmSync(fakeHome, { recursive: true, force: true });
+  }
+});