A surge arrester is a product installed near the end of any conductor which is long enough before the conductor lands on its intended electrical component. The purpose is to divert damaging lightning-induced transients safely to ground through property changes to its varistor in parallel arrangement to the conductor inside the unit. Also called a surge protection device (SPD) or transient voltage surge suppressor (TVSS), they are only designed to protect against electrical transients resulting from the lightning flash, not a direct lightning termination to the conductors.
Lightning termination to earth results in ground currents which pass over buried conductors and induce a transient that propagates outward towards the ends of the conductor. The same induction happens in overhead and above ground conductors which experience the passing energy of an atmospheric EMP caused by the flash. These devices only protect against induced transients characteristic of a lightning discharge's rapid rise-time and will not protect against electrification caused by a direct termination to the conductor. Transients similar to lightning-induced, such as from a high voltage system's switch faulting, may be safely diverted to ground, however, continuous overcurrents are not protected by these devices. The energy in the transient is infinitesimally small in comparison to that of a lightning discharge; however it is still of sufficient quantity to cause arcing between different circuit pathways within today's microprocessors.
Without very thick insulation, which is generally cost prohibitive, most conductors running for any length whatsoever, say greater than about 50 feet, will experience lightning-induced transients some time. Because the transient is usually initiated at some point between the two ends of the conductor, most applications install a surge arrestor just before the conductor lands in each device to be protected. Each conductor must be protected, as each will have its own transient induced, and each SPD must provide a pathway to earth to safely divert the transient away from the protected component, be it instrument or computer, etc. The one notable exception where they are not installed at both ends is in high voltage distribution systems. In general, the induced voltage is not sufficient to do damage at the electric generation end of the lines; however, installation at the service entrance to a building is key to protecting downstream products that are not as robust.