CubeSat missions are characterized by short development times and challenging budget constraints. Due to the constraints in terms of mass, volume, and power, it is often not possible to increase reliability by adding redundant subsystems to the spacecraft. Therefore, it is necessary to implement important error-proofing mechanisms to still be able to derive a high scientific benefit from these missions. Once the satellite has been launched, physical access to the satellite’s hardware is no longer possible. For this reason, systems are often implemented that allow automatic failure detection, isolation of the failure from other systems, as well as automatic recovery (FDIR). This paper describes the advantages and areas of application of software-defined radio platforms (SDRs) on board of small satellites and CubeSats. In addition, important aspects of the hardware FDIR concept of the PRETTY SDR payload system are presented. In order to prevent the hardware from being damaged with a fault-free power supply, different levels of fault monitoring are described as well.