diff --git a/hydra-node/src/Hydra/API/ServerOutput.hs b/hydra-node/src/Hydra/API/ServerOutput.hs
index a7856b6a0bc..07da5febb64 100644
--- a/hydra-node/src/Hydra/API/ServerOutput.hs
+++ b/hydra-node/src/Hydra/API/ServerOutput.hs
@@ -20,6 +20,7 @@ import Hydra.OnChainId (OnChainId)
 import Hydra.Party (Party)
 import Hydra.Prelude hiding (seq)
 import Hydra.Snapshot (Snapshot (utxo), SnapshotNumber)
+import Hydra.Network.Ouroboros (Host)
 
 -- | The type of messages sent to clients by the 'Hydra.API.Server'.
 data TimedServerOutput tx = TimedServerOutput
@@ -53,6 +54,7 @@ instance IsChainState tx => FromJSON (TimedServerOutput tx) where
 data ServerOutput tx
   = PeerConnected {peer :: NodeId}
   | PeerDisconnected {peer :: NodeId}
+  | PeerHandshakeFailure {host :: Host}
   | HeadIsInitializing {headId :: HeadId, parties :: [Party]}
   | Committed {headId :: HeadId, party :: Party, utxo :: UTxOType tx}
   | HeadIsOpen {headId :: HeadId, utxo :: UTxOType tx}
@@ -129,6 +131,7 @@ instance
   shrink = \case
     PeerConnected p -> PeerConnected <$> shrink p
     PeerDisconnected p -> PeerDisconnected <$> shrink p
+    PeerHandshakeFailure p -> PeerHandshakeFailure <$> shrink p
     HeadIsInitializing headId xs -> HeadIsInitializing <$> shrink headId <*> shrink xs
     Committed headId p u -> Committed <$> shrink headId <*> shrink p <*> shrink u
     HeadIsOpen headId u -> HeadIsOpen <$> shrink headId <*> shrink u
@@ -178,6 +181,7 @@ prepareServerOutput ServerOutputConfig{utxoInSnapshot} response =
   case output response of
     PeerConnected{} -> encodedResponse
     PeerDisconnected{} -> encodedResponse
+    PeerHandshakeFailure{} -> encodedResponse
     HeadIsInitializing{} -> encodedResponse
     Committed{} -> encodedResponse
     HeadIsOpen{} -> encodedResponse
diff --git a/hydra-node/src/Hydra/HeadLogic.hs b/hydra-node/src/Hydra/HeadLogic.hs
index a156af84686..1a02907fbf8 100644
--- a/hydra-node/src/Hydra/HeadLogic.hs
+++ b/hydra-node/src/Hydra/HeadLogic.hs
@@ -102,6 +102,8 @@ onConnectionEvent = \case
     causes [ClientEffect (ServerOutput.PeerConnected nodeId)]
   Disconnected{nodeId} ->
     causes [ClientEffect (ServerOutput.PeerDisconnected nodeId)]
+  HandshakeFailure{host} ->
+    causes [ClientEffect (ServerOutput.PeerHandshakeFailure host)]
 
 -- * The Coordinated Head protocol
 
diff --git a/hydra-node/src/Hydra/Network/Message.hs b/hydra-node/src/Hydra/Network/Message.hs
index 0e0210a43ca..02369d27702 100644
--- a/hydra-node/src/Hydra/Network/Message.hs
+++ b/hydra-node/src/Hydra/Network/Message.hs
@@ -11,6 +11,7 @@ import Hydra.Ledger (IsTx (TxIdType), UTxOType)
 import Hydra.Network (NodeId)
 import Hydra.Party (Party)
 import Hydra.Snapshot (Snapshot, SnapshotNumber)
+import Hydra.Network.Ouroboros (Host)
 
 data NetworkEvent msg
   = ConnectivityEvent Connectivity
@@ -24,6 +25,7 @@ instance Arbitrary msg => Arbitrary (NetworkEvent msg) where
 data Connectivity
   = Connected {nodeId :: NodeId}
   | Disconnected {nodeId :: NodeId}
+  | HandshakeFailure {host :: Host}
   deriving stock (Generic, Eq, Show)
   deriving anyclass (ToJSON, FromJSON)