The protection of a microgrid containing inverter- based distributed generators (IBDGs) presents several problems if traditional techniques which rely on the current (fuses and overcurrent relays) are used. A possible solution to these problems is the use of a new type of the relay which takes advantage of the enhanced processing techniques and communication infrastructure, both of which are recently becoming available for power networks application. This paper proposes a new communication-based protection scheme for isolated microgrids where a data mining approach is used to identify the relay settings and parameters. A feature selection technique is implemented to help identify the most relevant electrical features required for the fault detection and to establish the best communication strategy to use between relays. The proposed approach is tested using a MATLAB simulation of a facility scale isolated microgrid embedded with IBDGs. The results show that a differential protection scheme that relies on symmetrical components is the most effective strategy for protecting microgrids with IBDGs.