Microfluidics is an emerging field giving rise to a number of scientific developments with wide applications in proteomics, genomics, DNA analysis, drug delivery systems and lab-on-a-chip. Among the various microfluidic structures, microchannels form an integral part of Lab-on-a-chip devices for clinical diagnosis. The geometrical accuracy and surface finish quality of the microchannels affect the performance of microfluidic systems, thereby demanding a precise microfabrication technique for realizing microchannels. Spark assisted chemical engraving (SACE) is an effective hybrid micromachining technique used for micro-structuring non-conducting substrates such as glass and ceramics. In the present work, we report on a room temperature coated thick insulating film for improving the quality of the microchannels realized using a SACE process. The insulator film coated around a tool electrode confines the spark discharges only to the bottom surface of the tool. Moreover, the proposed insulator coating methodology does not require any cost intensive equipment, carrier gases, vacuum units and a clean room environment. Experimental results demonstrate that for same process parameters a micro-channel fabricated using an insulated tool has its overcut reduced by 57.8% and machining depth improved by 19.53% with a smooth surface and regular edges as compared to the channels realized using an uninsulated tool. © 2017 Taylor & Francis.