Electrical faults cause enormous damage due to fires and loss of equipment. Of far greater importance is the danger to human life through electrocution. Because a human is generally at ground potential, the body can act as an alternate current path when a ground fault occurs. It takes only about 5 mA flowing through the human body to cause a shock, and as little as 100 mA can be fatal. That makes ground fault monitoring vital to maintaining a safe electrical installation.
Short circuits and ground faults are two common electrical faults. A short circuit is when two active conductors at different voltages are accidentally directly connected, such as when a hot conductor is shorted to a neutral conductor, thus resulting in a large amount of current flow and the fuse or circuit breaker opening instantaneously. A ground fault is any unintended flow of current from an electrical system to ground. This could be a line in a single-phase system (or L1, L2, or L3 in multiphase systems) making direct or partial contact with the grounded portion of the electrical system via water leaks, insulation breakdown, or other causes. Depending on the type of electrical system (solidly grounded, resistance grounded, or ungrounded) ground faults are sometimes not high enough current to immediately cause a fuse or circuit breaker opening.
Almost all electrical enclosures are bonded or grounded to eliminate the hazardous potential of the device relative to the ground or the floor that someone is standing on. In other words, it reduces shock hazards. When we look at a solidly grounded power system, we want to ensure a low-resistance grounding path back to the power source. This ensures that if there is a ground fault from an energized conductor to the frame of a piece of equipment, the exposed parts of the equipment stay at a low voltage relative to ground and minimize the risk of shock to people. This low resistance path also allows large amounts of current to flow, which will typically trip breakers or open fuses very quickly. If the path were to become high resistance due to a tenuous connection to ground, the frame of the equipment could have high voltage on it, causing a shock/electrocution hazard when a human contacts the enclosure and provides a lower resistance path back to ground.
This is important for solidly grounded and resistance-grounded systems in industrial applications such as manufacturing and mining, where human safety is paramount. These systems (480V or 600V) usually have a transformer that has its neutral connected to ground directly (solid ground) or via an impedance (NGR or Neutral Grounding Resistor). The ground fault devices protecting these systems rely on the integrity of the ground conductor connection to ground to operate. The grounding conductor's function is to keep your equipment as close as possible to ground potential and provide a safe path for ground fault current to flow. If the system were disconnected from ground potential, you would have an ungrounded system, and the ground-fault protection (based on residual current monitoring) will no longer function. Ungrounded systems require very different monitoring equipment to be operated safely so it is very important to maintain ground continuity to keep solidly ground or resistance-grounded systems safe.