While networks offer substantial benefits, they also facilitate the spread of major public threats such as misinformation in social networks, supply chain disruptions, cascading failures of interconnected banks, and epidemics. Efforts by authorities to mitigate contagion can inadvertently diminish agents’ incentives to guard against it. This effect is amplified by the network itself, which can counteract the intended benefits of these mitigating measures. Specifically, as more effective tools are deployed to combat contagion, the interplay between mitigation efforts and endogenous network formation create a “network hazard,” leading to reduced welfare, increased contagion, and greater volatility.