Structural designs for composite laminated systems can be optimized for a fail-safe in-service performance by introducing the built-in cumulative-damage-indicators for the progressive degradation of material properties. This design methodology is based on the concepts of the characteristic failure signature (CFS), cumulative-damage states and a load-drop sequence that characterize the stress-strain response and progressive accumulation of damage. The cumulative damage mechanics is based on the three-dimensional laminate analysis that is used to predict nonlinear response of composites, accumulation of damage and failure behavior. An earlier-developed nonlinear analysis involves an incremental formulation that couples the three-dimensional laminate analysis with a progressive ply-failure methodology, which has been tested in the World-Wide Exercise on Composites Failure Theories. The failure signatures are shown to have unique “safety features” that depend on the ply stacking sequence and predominant loading. To refine the analysis of micromechanical damage a model for the macro-to-micro coupling is introduced. Various examples of failure envelopes, characteristic failure signatures, a safety criterion and the “safe” CFSs that lead to the desired controlled failures are discussed for symmetric balanced laminates.