The red rotary switch with 1, 2, Both and Off is still the most common battery switch on boats, and it gets the blame for a lot of flat batteries and dead alternators. Rod Collins of Compass Marine argues the switch is fine. The trouble is how builders wire it and how owners use it, and both show up on survey.
How a surveyor checks it
Start with the switch itself. Look behind it at the studs and lugs for heat discolouration, loose nuts and hardened insulation. It carries the full charging and starting current, so a poor connection here gets hot.
Then the flicker test. Compass Marine's method: cabin lights on, turn the switch slowly from 1 through Both to 2. Good switches from the main makers are make-before-break, but as they age they can wear to break-before-make. If the lights flicker at all, replace the switch. A fraction of a second's break is enough to cause a load dump.
Then the wiring. On most builder installations the alternator feeds back through the starter cable to the switch's common post. That means the switch is the only path from alternator to battery, and turning it to Off with the engine running opens that path. Compass Marine says the spike that follows often blows the alternator's rectifier diodes and can damage DC electronics on the same post. It repairs quite a few alternators every year for this reason. Some switches have an alternator field disconnect, but Compass Marine finds it's usually unused or wired wrongly.
Note where the switch is. Compass Marine notes switches mounted in DC panels, away from the batteries, are usually not ABYC compliant. And check what bypasses it: a bilge pump wired direct to the house bank is good practice, but the owner should know which wires stay live.
What decides the grade
Heat. A burnt or loose switch is a fire risk and an A. A worn switch that flickers is a B: it works, but the next time someone moves it under way it can take out the alternator. Missing labels and instructions are a C, though with a 1-2-Both switch they matter more than usual, because the most expensive mistakes are made by people who don't know the switch.