This paper proposes a new approach to the distributed generation system protection coordination based on directional overcurrent protections with inverse-time characteristics. The key question of protection coordination is the determination of correct values of all inverse-time characteristics coefficients. The coefficients must be correctly chosen considering the sufficiently short tripping times and the sufficiently long selectivity times. In the paper a new approach to protection coordination is designed, in which not only some, but all the required types of short-circuit contributions are taken into account. In radial systems, if the pickup currents are correctly chosen, protection coordination for maximum contributions is enough to ensure selectivity times for all the required short-circuit types. In distributed generation systems, due to different contributions flowing through the primary and selective protections, coordination for maximum contributions is not enough, but all the short-circuit types must be taken into account, and the protection coordination becomes a complex problem. A possible solution to the problem, based on an appropriately designed optimization, has been proposed in the paper. By repeating a simple optimization considering only one short-circuit type, the protection coordination considering all the required short-circuit types has been achieved. To show the importance of considering all the types of short-circuit contributions, setting optimizations with one (the highest) and all the types of short-circuit contributions have been performed. Finally, selectivity time values are explored throughout the entire protected section, and both the settings are compared.