diff --git a/lightningd/channel/channel_wire.csv b/lightningd/channel/channel_wire.csv
index 11003b0ec..64ae9d3cc 100644
--- a/lightningd/channel/channel_wire.csv
+++ b/lightningd/channel/channel_wire.csv
@@ -9,7 +9,10 @@ channel_gossip_bad_message,0x8004
 # These are due to peer.
 channel_peer_write_failed,0x8010
 channel_peer_read_failed,0x8011
+
 channel_peer_bad_message,0x8012
+channel_peer_bad_message,,len,u16
+channel_peer_bad_message,,msg,len*u8
 
 # Received and sent funding_locked
 channel_normal_operation,1001
diff --git a/lightningd/gossip_control.c b/lightningd/gossip_control.c
index 3ad340c08..3b54cf5d9 100644
--- a/lightningd/gossip_control.c
+++ b/lightningd/gossip_control.c
@@ -99,13 +99,14 @@ static int gossip_msg(struct subd *gossip, const u8 *msg, const int *fds)
 	enum gossip_wire_type t = fromwire_peektype(msg);
 
 	switch (t) {
-	/* We don't get told about fatal errors. */
+	/* subd already logs fatal errors. */
 	case WIRE_GOSSIPSTATUS_INIT_FAILED:
 	case WIRE_GOSSIPSTATUS_BAD_NEW_PEER_REQUEST:
 	case WIRE_GOSSIPSTATUS_BAD_REQUEST:
 	case WIRE_GOSSIPSTATUS_FDPASS_FAILED:
 	case WIRE_GOSSIPSTATUS_BAD_RELEASE_REQUEST:
 	case WIRE_GOSSIPSTATUS_BAD_FAIL_REQUEST:
+		break;
 	/* These are messages we send, not them. */
 	case WIRE_GOSSIPCTL_INIT:
 	case WIRE_GOSSIPCTL_NEW_PEER:
diff --git a/lightningd/hsm_control.c b/lightningd/hsm_control.c
index a91a25580..5d42a91e8 100644
--- a/lightningd/hsm_control.c
+++ b/lightningd/hsm_control.c
@@ -59,12 +59,13 @@ static int hsm_msg(struct subd *hsm, const u8 *msg, const int *fds)
 		     : "unknown peer",
 		     tal_hex(msg, badmsg));
 
-	/* We don't get called for failed status. */
+	/* subd already logs fatal errors. */
 	case WIRE_HSMSTATUS_INIT_FAILED:
 	case WIRE_HSMSTATUS_WRITEMSG_FAILED:
 	case WIRE_HSMSTATUS_BAD_REQUEST:
 	case WIRE_HSMSTATUS_FD_FAILED:
 	case WIRE_HSMSTATUS_KEY_FAILED:
+		break;
 
 	/* HSM doesn't send these */
 	case WIRE_HSMCTL_INIT:
diff --git a/lightningd/peer_control.c b/lightningd/peer_control.c
index 0206e25fa..d674e6ba8 100644
--- a/lightningd/peer_control.c
+++ b/lightningd/peer_control.c
@@ -940,6 +940,20 @@ static int peer_got_funding_locked(struct peer *peer, const u8 *msg)
 	return 0;
 }
 
+static int peer_got_bad_message(struct peer *peer, const u8 *msg)
+{
+	u8 *err;
+
+	/* Don't try to fail this (again!) when owner dies. */
+	peer->owner = NULL;
+	if (!fromwire_channel_peer_bad_message(peer, NULL, NULL, &err))
+		err = (u8 *)tal_strdup(peer, "Internal error after bad message");
+	peer_fail_permanent(peer, take(err));
+
+	/* Kill daemon (though it's dying anyway) */
+	return -1;
+}
+
 static int channel_msg(struct subd *sd, const u8 *msg, const int *unused)
 {
 	enum channel_wire_type t = fromwire_peektype(msg);
@@ -961,7 +975,7 @@ static int channel_msg(struct subd *sd, const u8 *msg, const int *unused)
 	case WIRE_CHANNEL_GOT_FUNDING_LOCKED:
 		return peer_got_funding_locked(sd->peer, msg);
 
-	/* We never see fatal ones. */
+	/* We let peer_owner_finished handle these as transient errors. */
 	case WIRE_CHANNEL_BAD_COMMAND:
 	case WIRE_CHANNEL_HSM_FAILED:
 	case WIRE_CHANNEL_CRYPTO_FAILED:
@@ -969,7 +983,12 @@ static int channel_msg(struct subd *sd, const u8 *msg, const int *unused)
 	case WIRE_CHANNEL_INTERNAL_ERROR:
 	case WIRE_CHANNEL_PEER_WRITE_FAILED:
 	case WIRE_CHANNEL_PEER_READ_FAILED:
+		return -1;
+
+	/* This is a permanent error. */
 	case WIRE_CHANNEL_PEER_BAD_MESSAGE:
+		return peer_got_bad_message(sd->peer, msg);
+
 	/* And we never get these from channeld. */
 	case WIRE_CHANNEL_INIT:
 	case WIRE_CHANNEL_FUNDING_LOCKED:
diff --git a/lightningd/subd.c b/lightningd/subd.c
index 7101ae084..1b6e46dd7 100644
--- a/lightningd/subd.c
+++ b/lightningd/subd.c
@@ -303,11 +303,12 @@ static struct io_plan *sd_msg_read(struct io_conn *conn, struct subd *sd)
 
 	if (type == STATUS_TRACE)
 		log_debug(sd->log, "TRACE: %.*s", str_len, str);
-	else if (type & STATUS_FAIL)
-		log_unusual(sd->log, "FAILURE %s: %.*s",
-			    sd->msgname(type), str_len, str);
 	else {
-		log_info(sd->log, "UPDATE %s", sd->msgname(type));
+		if (type & STATUS_FAIL)
+			log_unusual(sd->log, "FAILURE %s: %.*s",
+				    sd->msgname(type), str_len, str);
+		else
+			log_info(sd->log, "UPDATE %s", sd->msgname(type));
 
 		if (sd->msgcb) {
 			int i = sd->msgcb(sd, sd->msg_in, sd->fds_in);