diff --git a/server/src/main/scala/org/apache/livy/utils/SparkKubernetesApp.scala b/server/src/main/scala/org/apache/livy/utils/SparkKubernetesApp.scala
index fec93ca4e..35fc168bb 100644
--- a/server/src/main/scala/org/apache/livy/utils/SparkKubernetesApp.scala
+++ b/server/src/main/scala/org/apache/livy/utils/SparkKubernetesApp.scala
@@ -575,11 +575,10 @@ private[utils] case class KubernetesAppReport(driver: Option[Pod], executors: Se
     if (!livyConf.getBoolean(LivyConf.KUBERNETES_SPARK_SIDECAR_ENABLED)) {
       return phase
     }
-    if (phase != KubernetesApplicationState.RUNNING) {
-      return phase
-    }
-    // if the POD is still running, check spark container termination status
-    // default to pod phase if container state is indeterminate.
+    // When sidecars are enabled, prefer spark container's exit status over
+    // pod phase since a sidecar failure can mark the pod as "failed" even
+    // if the driver exited successfully. Default to pod phase if the spark
+    // container cannot be found (e.g. misconfigured container name).
     getTerminalState(podStatus).getOrElse(phase)
   }
 
@@ -588,7 +587,7 @@ private[utils] case class KubernetesAppReport(driver: Option[Pod], executors: Se
   def getTerminalState(podStatus: PodStatus): Option[String] = {
     import scala.collection.JavaConverters._
     val sparkContainerName = livyConf.get(LivyConf.KUBERNETES_SPARK_CONTAINER_NAME)
-    for (c <- podStatus.getContainerStatuses.asScala) {
+    for (c <- Option(podStatus.getContainerStatuses).map(_.asScala).getOrElse(Nil)) {
       if (c.getName ==  sparkContainerName && c.getState.getTerminated != null) {
         val exitCode = c.getState.getTerminated.getExitCode
         if (exitCode == 0) {
diff --git a/server/src/test/scala/org/apache/livy/utils/SparkKubernetesAppSpec.scala b/server/src/test/scala/org/apache/livy/utils/SparkKubernetesAppSpec.scala
index 759cbed10..57f5d4e40 100644
--- a/server/src/test/scala/org/apache/livy/utils/SparkKubernetesAppSpec.scala
+++ b/server/src/test/scala/org/apache/livy/utils/SparkKubernetesAppSpec.scala
@@ -91,6 +91,58 @@ class SparkKubernetesAppSpec extends AnyFunSpec with LivyBaseUnitTestSuite with
       }
     }
 
+    def podWithSidecar(phase: String, terminatedExitCode: Option[Int]): Pod = {
+      val builder = new PodBuilder()
+        .withNewStatus()
+          .withPhase(phase)
+        .endStatus()
+        .withNewSpec().endSpec()
+        .withNewMetadata().endMetadata()
+      terminatedExitCode match {
+        case Some(exitCode) =>
+          builder.editStatus()
+            .addNewContainerStatus()
+              .withName("spark-container")
+              .withNewState()
+                .withNewTerminated()
+                  .withExitCode(exitCode)
+                .endTerminated()
+              .endState()
+            .endContainerStatus()
+          .endStatus()
+        case None => ()
+      }
+      builder.build()
+    }
+
+    it("should prefer spark container exit status over pod phase when sidecars are enabled") {
+      def state(pod: Pod, sidecarEnabled: Boolean): String =
+        KubernetesAppReport(
+          Some(pod), Seq.empty, IndexedSeq.empty, None,
+          new LivyConf(false).set(LivyConf.KUBERNETES_SPARK_SIDECAR_ENABLED, sidecarEnabled)
+        ).getApplicationState
+
+      // A sidecar failure marks the pod "Failed" even though the spark container exited 0.
+      assertResult("succeeded") {
+        state(podWithSidecar("Failed", Some(0)), sidecarEnabled = true)
+      }
+      assertResult("failed") {
+        state(podWithSidecar("Running", Some(1)), sidecarEnabled = true)
+      }
+      // Spark container not yet terminated (or not found): fall back to pod phase.
+      assertResult("running") {
+        state(podWithSidecar("Running", None), sidecarEnabled = true)
+      }
+      // getContainerStatuses is null while the pod is pending: no NPE, fall back to phase.
+      assertResult("pending") {
+        state(podWithSidecar("Pending", None), sidecarEnabled = true)
+      }
+      // Sidecars disabled: pod phase is authoritative even if the spark container failed.
+      assertResult("failed") {
+        state(podWithSidecar("Failed", Some(0)), sidecarEnabled = false)
+      }
+    }
+
     def livyConf(lokiEnabled: Boolean): LivyConf = new LivyConf(false)
       .set(LivyConf.KUBERNETES_GRAFANA_LOKI_ENABLED, lokiEnabled)