What would cause the Transfer switch to fail?
I hate to get all "Religious" on you but.. Anything made by man can fail.. Just because it fails.
There are 2 or 3 kinds of transfer switch.. One (My Intelletec) when the generator is running, the contractors are NOT energized, they "Default" to SHORE power. This kind almost never fails when running on shore power.. It can (And mine did) fail when transferring (under warranty thankfully)
Another kind has different contractors (relays) for Shore and Generator.. I'm nto sure but I think these "Default" to inverter when no other power is present (That is the De-energized state of the contractors) When you plug in one set pulls in for SHORE power.. Fire up the generator and that set drops out and another set pulls in for GENERATOR.. Shut down and it drops back to INVERTER.
On this type be you on shore or Generator one set of relays is always energized.. and thus, a coil can burn out and dump you. Or a "Control" part.
Oh, the Religious part.. The Religious believe that works of God are foolproof.. That's why so many try to make fools of themselves. (Joking)