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Who’s Responsible when a Driverless Car Crashes? Tesla’s Got an Idea

Tesla Motors Inc. TSLA 2.58 % is looking at the good old-fashioned turn signal as a potential solution to a liability debate associated with driverless vehicle technology.

The Palo Alto, Calif., electric-car maker soon will begin activating semiautonomous features, including the capability to pass other cars without driver intervention, in its Model S sedans. A driver can trigger the passing function by hitting the turn signal, according to people familiar with the technology. That action not only tells the car it can pass, but also means the driver has given thought to whether the maneuver is safe.

While it might seem a minor detail, having drivers activate the turn signal could help auto makers like Tesla avoid a regulatory pile up. As more driverless features are built into cars and trucks, auto regulators and the insurance industry are working to fine-tune liability rules that govern who is responsible if a car gets in an accident or hits a pedestrian.

By hitting a turn-signal stalk, a driver theoretically acknowledges road conditions are appropriate for a...