An arc is a potential equalisation (compensation of potential differences, flashover) between two electrical loaded compounds through their ambient medium. The most common example of an arc is a flash of a thunderstorm, discharging itself through the medium air.
An arc most times appears between two overhanging parts (e.g. points, tops) of the compounds. It can be signalised in advance by the emergence of an ionizing duct. Very high current floats through the arc, compensating the potential difference between the two terminals. The potential difference will be equalised and the arc breaks down again.
In case an unwanted arc occurs between electrical wires or components, it is called accidental arcing or arcing fault. Accidental arcing usually has a negative effect on the service life of components or can destroy them directly.
An arc can also occur furtively - e.g. inside of an insulation coating - and is not necessarily visible.
To avoid later damaging, often after a short test (low voltage test) an insulation test (high voltage test, HV-AC test, HV-DC test) is performed to test the functioning of the insulation.