With the assessment the reliability of secondary system in smart substation, the existing studies have not given full consideration to the effect of protection failure, a kind of integrated risk assessment method of secondary system considering the protection failure is proposed. Firstly, the Markov processes are used to obtain the steady-state probabilities of secondary equipment. According to functional decomposition of IEC61850, the reliability block diagram is used to get the steady-state availabilities, rejection rates, and malfunction rates for the distributed protection systems. For the failure scenarios of protection, the occurrence probabilities and the affected primary equipment are analyzed. The delete and leave algorithm is used to find the minimal path sets and the reliability indexes of the corresponding main wiring. Considering the reliability indexes of main wiring and load loss, the probability of protection system failure, the load loss and the relative value of fault frequency of main wiring are multiplied to define the risk indexes of the protection system abnormity. The abnormal risks of protection systems are obtained, as well as the outage-failure risks and their proportion in the total risks of whole substation, as a result, the influence of protection failure on integrated risk can be analyzed. The examples of typical substation illustrate the effectiveness of proposed smart substation risk assessment method. This work is supported by National Natural Science Foundation of China (No. 51377137).