A Steer-by-Wire system has so many advantages comparing with conventional mechanical steering system that it is expected to take key role in future environment friendly vehicle and intelligent transportation system. The mechanical connection between the hand wheel and the front axle will become obsolete. SBW system provides many benefits in terms of functionality, and at the same time present significant challenges - fault tolerant, fail safety - too. In this paper, failure analysis of SBW system will be performed and than sensor fusion technique will be proposed for fail safety of SBW system. A sensor fusion logic of steering angle sensor by using steering angle sensor, torque sensor and rack position sensor will be developed and simulated by fault injection simulation.