An arc-flash hazard protection system for a three-phase electrical distribution system having a plurality of switchgear interconnected with a plurality of distribution buses is disclosed. The protection system includes a plurality of first and second current transformers in signal communication with respective first and second phases of each of the plurality of switchgear, and a bus differential relay connected to receive output signals from each of the first and second current transformers of each of the plurality of switchgear to establish a bus differential protection scheme utilizing only two of the three available phases for each of the plurality of switchgear. The bus differential relay includes a processor responsive to computer executable code when executed thereon to provide a relay trip output signal to each of the plurality of switchgear in response to the bus differential protection scheme of the respective switchgear indicating an imbalanced three-phase current distribution thereat indicative of an arc-flash condition.