The introduction of intelligent electronic equipment and virtual terminal connections in smart substations makes it necessary to conduct in-depth research on information interaction of intelligent electronic equipment and risk diffusion process of secondary systems of smart substation during the secondary system risk assessment. Based on this, combined with secondary-system information flow and protection logic, the network models reflecting the dependence between devices, as well as between the protection process and protective devices were established based on function correlation. Subsequently, a secondary-system risk diffusion model is established according to the risk diffusion process caused by the failure of certain devices. Finally, based on a case study of the protective system, the risk diffusion characteristics were obtained via MATLAB simulations, and the risk assessment is carried out considering system scale, risk recovery parameters and misoperations. The results verify the proposed method.