The sensor thinks that the trunk is open even though firmly shut. It could be that the sensor itself is faulty, the trunk is not contacting the sensor or the wiring has a fault.
Look around and locate the activation point. It could be in the locking mechanism or somewhere around the edge of the trunk or lid where they make contact with each other when closed.
Are the cables attached?
Are the contacts clean and tight?
If it is a "push button" type switch, does it move freely when pressed?
Can you hear a click or noise as contact is made when pressed? Does the trunk light go out when pressed?
You can try shorting across the switch to see if that stops the problem and if it does then replace it. If it doesn't, then the problem is in the wiring from the switch to the dash indicator. You could leave the short in place if it works but if you do leave the trunk open, you won't know about it.
This warning light illuminates when the trunk lid is not closed securely with the ignition switch in any position.
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