Electrical short circuits is the situation where circuit protection devices (CPDs) become absolutely important.
In a properly functioning electrical circuit, the circuit load (electric lights, motors, devices, and so forth) effectively limit the current in a circuit to just what they need to operate.
In a short circuit, there is no limit. The short will try to cause the circuit to carry as much current as the circuit source can produce. In a circuit powered by a SLI (engine) battery, that current can be as much as 900 or more amps. For the most part, a 16 gauge automotive wire can only safely carry 12 amps. (Very short lengths of 16 gauge auto wire can carry more current, with voltage drop being more of a concern than current level -- due to Ohm's Law.)
Obviously, a wire meant to carry only 12 amps is going to go white-hot very quickly if subjected to 900+ amps. If you're very lucky, the wire will quickly melt and interrupt the circuit without causing additional damage. However, depending on what's near the wire, it could also easily start a fire.
A properly sized and installed CPD will prevent this from happening, blowing or tripping before all those amps can hit the wire.
In the American Boat and Yacht Council (ABYC) standards, each circuit must have a CPD within 7 inches of a circuit source or distribution point. There are a few exceptions, mostly for engine starter cables and main battery cables, but this is a good rule to follow.
Simply put, the closer a CPD is to a circuit's source, the more likely it is to stop an electrical short from creating a catastrophe.
Note: I prefer referencing and following ABYC standards for three reasons:
1. The environment where boats and yachts operate make it much, much harder to safely escape a fire, so the electrical standards have an added margin of safety written into them.
2. ABYC standards are routinely referenced is a wide variety of publications and websites, making it much easier to find guidance based on ABYC standards than that pertaining to motor vehicles. Likewise, the guidance is more thorough and definitive. (I often refer to and cite Blue Sea Systems literature but there are many more marine electrical system information sources that are just as good … and virtually all rely on ABYC standards.)
3. ABYC is a organization, like ISO and OSHA, that researches, develops, and publishes applicable standards. Rather than separately developing mandatory government regulations, applicable laws in many nations (including the United States and Canada) simply refer to ABYC standards and use those standards for enforcement.
