Every ASEA shore power converter contains an Isolation transformer. Why? The oldest and best reason in the book: Safety. By isolating your ship’s power system from the shore power, fault current cannot travel through the water and electrocute swimmers.
Without an isolation transformer, there is a direct connection between the earth ground of the dock and the ship’s electrical system. A loose wire on the boat may cause fault current to flow through the ship’s hull to the water, and back to the shore supply. That current flowing through the water is what makes swimming in the marina so dangerous!
With an isolation transformer, power is transmitted to the boat via the magnetic field in the core. There is NO direct connection. The shore power earth terminates on the shield of the transformer, and a new ground is created for the ship. The two grounds are not connected – so fault current will not flow between them.
Another potential hazard solved by an isolation transformer is Polarization. If the supply from the shore has the hot and cold wires swapped, your power on/off switch may not be disconnecting your appliance from power. Or it may cause the normally grounded case to be hot. Again, it’s the magnetic field of the transformer core that protects you – swapped wires at the shore will not cause swapped polarity onboard.
A secondary benefit is that an isolation transformer also protects against Galvanic Corrosion. The same isolation properties that separate your ships ground from the dock ground, prevent galvanic current from eating your zincs, or other expensive metal pieces of your boat. Even if the ship next to you is not isolated.