This paper proposes a new design guideline for reliability improvement of distribution networks using distributed energy resource (DER). The proposed guideline is advised to maintain CDI values of all customers under a certain pre-defined threshold value. The impact of the switching devices failure on the reliability is also considered and proper corrections are made on various threshold values within the guideline, therefore the obtained results will also be valid when considering non-ideal switching devices. The simulation results show that the guideline produces reasonably good results. Furthermore the proposed correction method for the calculation of non-ideal switching devices is validated.