The invention aims to provide a reliable hybrid vehicle battery fault management system and a management method thereof. The management system comprises a vehicle control unit, a battery controller, a motor state monitoring module, a battery voltage monitoring module, a battery current monitoring module, a battery temperature monitoring module, a battery insulation monitoring module, a high voltage precharge monitoring module and a battery equalization monitoring module, and a high voltage loop interlocking monitoring module, wherein the motor state monitoring module, the battery voltage monitoring module, the battery current monitoring module, the battery temperature monitoring module, the battery insulation monitoring module, the high voltage precharge monitoring module and the battery equalization monitoring module are connected with the vehicle controller; the high voltage loop interlocking monitoring module is connected with the battery controller; the battery controller is connected with the vehicle controller and the relay controlling the on and off of a battery high voltage loop; and the vehicle controller is also connected with a fault prompt unit. The management system carries out treatment according to different battery faults and the operation conditions of a motor, ensures the safety of driving and drivers and passengers, improves the safety of a battery system and the service life of the battery pack and makes the whole battery system more reliable.