This paper presents a new fault detection scheme for voltage fed inverter to improve the reliability of power electronic system, which is of paramount importance in the wide industrial applications. The proposed method is achieved by using voltage across lower switches in each phase under the switch fault condition. The reconfiguration method is achieved by the four-switch topology connecting a faulty leg to the middle point of DC-link using bidirectional switches. The proposed method has a simple algorithm and fast fault detection time. Therefore, normal operation of the system after faults is continuously achieved by reconfiguration of system topology. The superior performance of the proposed fault detection and tolerance method are proved by simulation.