In overhead distribution lines, outages due to trees, animals, etc. in contact with covered conductors have become one of the serious problems in the recent years. Especially, the outage due to bird nests is severe. From the observa-tions of the bird nests in the actual overhead distribution lines, it is guessed that the outage follows a leak through the nest material which approaches to an energized equipment under rainy condition. On the other hand, it is pointed out that the outage may also follow a surface flashover on the covered conductor between the nest material and the energized equipment when a lightning surge whose peak value is lower than the operation voltage of an arrester appears. Thus, the way how the outage occurs is not clarified in detail. In this study, the surface flashover was observed in a laboratory test in spite of the installation of the arrester. The flashover occurred on the covered conductor which had a knife trace damage passed through the conductor jacket when a tie wire was grounded and a lightning impulse voltage was applied. Then, the surface flashover voltages were measured for the various damaged position. Furthermore, the effects of wet and the shape of damage on the flashover voltage were examined. From the results, the occurrence of the outage accompanied with the surface flashover was discussed.