On the whole megger testing is non destructive. What happens is a DC voltage is applied to the device or winding under test. It is an insulation test to see is the insulation has been injured in any way to cause a short circuit when normal power is applied to it. On my megger there are 3 ranges 300V, 750V, and 1000 volts. Applying the proper voltage is essential to not damaging the device you are testing. Working voltages up to 240 volts should use the 300 range. Working voltages up to 600 volts use the 750 volt range and working voltages above 600 use the 1000 volt range. As you can see if you used the 1000 volt range on a device that had a working voltage of say 24 volts you could damage the insulation just by testing it. So meggering a device is non destructive if you use the tester as its instructions tell you to.
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It is the terminal on the megger that the ground cable connect to when testing a device to ground.
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The megger is used to find insulation resistance in any equipement. It will generate around 10kVA power to test.
If a megger test fails you have a short between the two wires or the wire to ground that you are testing. This short circuit has to be repaired before the equipment is placed back into service.