What term refers to a material applied to surfaces for decoration and protection?

The term that best describes a material applied to surfaces for both decoration and protection is "coating." Coatings can encompass a variety of substances, including paints, varnishes, and sealants. They provide aesthetic appeal while also serving functional purposes such as preventing corrosion, moisture penetration, or wear.

While "covering" might suggest an addition to the surface, it does not specifically imply the protective aspects that a coating offers. "Finish" often refers to the final appearance or texture of a surface treatment rather than the material applied. "Insulation," on the other hand, pertains more to materials that inhibit heat transfer rather than serving a dual decorative and protective role. Therefore, "coating" is the most precise term among those presented.