A capacitor includes a ceramic capacitor body having opposite ends and comprised of a plurality of electrode layers and dielectric layers and first and second external terminals attached to the ceramic capacitor body. The internal active electrodes within the ceramic capacitor body are configured in an alternating manner. Internal electrode shields within the ceramic capacitor body are used to assist in providing resistance to arc-over. The shields may include a top internal electrode shield and an opposite bottom internal electrode shield wherein the top internal electrode shield and the opposite bottom internal electrode shield are on opposite sides of the plurality of internal active electrodes and each internal electrode shield extends inwardly to or beyond a corresponding external terminal to thereby provide shielding. Side shields are used. The capacitor provides improved resistance to arc-over, high voltage breakdown in air, and allows for small case size. To further increase voltage breakdown, a coating on the ceramic capacitor may be used.