This paper deals with the problem of fault-tolerant control (FTC) for switched systems in continuous-time case. A switched proportional integral observer is designed to estimate the state and the fault simultaneously. According to the fault estimation information, a fault-tolerant control strategy is built to automatically accommodate faults while maintaining system performances such as stability. Delay-dependent conditions are derived using a multiple Lyapunov–Krasovskii functional while respecting the average dwell time constraints in the objective to obtain less conservative results. A switched electrical circuit is studied to illustrate the applicability of the suggested FTC technique.