The invention relates to a enclosed insulation assembly of a ground lug and a mounting method thereof. The structure is simple; mounting becomes convenient; and safety is improved. The ground lug in an L shape has a vertical segment and a horizontal segment, wherein the two segments are connected into one. The insulation assembly comprises an assembly I and an assembly II. The assembly I is used for covering the vertical segment; and the assembly II is used for covering the horizontal segment. The assembly I consists of a standing plate I, a connecting plate, and a standing plate II; the standing plate I and the standing plate II are respectively connected to the two sides of the connecting plate by a push mechanism, so that the vertical segment of the ground lug is arranged between the standing plate I and the standing plate II. The assembly II in a rectangular-frame shape has a horizontal plate I and a horizontal plate II, wherein the two horizontal plates are parallel to each other; the horizontal plate I is located above the horizontal plate II; and the horizontal segment of the ground plug is arranged between the horizontal plate I and the horizontal plate II. Therefore, advantages of convenient installation, reliable sealing, and prevented easy shedding.