Because of the potential for disaster it possesses, wiring should be routed above “normal” bilge water levels and in cases where this cannot be avoided—bilge pumps and switches for instance—careful attention must be paid to wire routing and connection methods.
My own rule of thumb for bilge pump and related component wiring calls for connections to be made 18 inches above the top of the pump, using a tin-plated, insulated terminal strip which, upon completion of the assembly, is sprayed with corrosion inhibitor. As an alternative, or if the 18-inch elevation is not possible, waterproof heat shrink butt splices should be used. Still, in my experience, the source of stray current corrosion is often damaged float switch wiring insulation and as such it should be routed out of harm’s way and inspected regularly for any signs of failure or corrosion.
