In general, a varistor including a passivation layer and a method of forming such a varistor are disclosed. The varistor comprises a ceramic body comprising a plurality of alternating dielectric layers and electrode layers. The varistor also comprises a first external terminal on a first end surface and a second external terminal on a second end surface opposite the first end surface wherein at least two side surfaces extend between the first end surface and the second end surface. The varistor also comprises a passivation layer on at least one side surface of the ceramic body between the first external terminal and the second external terminal. The passivation layer includes a phosphate and a metal additive including an alkali metal, an alkaline earth metal, or a mixture thereof. The passivation layer has an average thickness of from 0.1 micron to 30 microns.