Recently, polymer nanocomposites proved various enhancements in many properties compared to the base material. This paper studies the effect of the incorporation of nanoparticles on some of the electrical properties of Polyester Varnish used for electrical machines insulating. Hence, different combinations of varnish nanocomposites will be fabricated to test the dielectric characteristics of the new material and check the suitability of using the newly fabricated materials as insulation in electrical machines. Accordingly, the effect of adding silicon dioxide (SiO2) nanoparticles with different loadings of 0.2, 0.4, and 0.7 % (wt/wt) to the base varnish material will be investigated. Permafil 9637 dipping and VI varnishes are used as a base material of study, SiO2 nanoparticles (with an average sphere diameter ranging between 10 - 20 nm) are used as nanofillers, and Thinner is used as a solvent. Both planetary centrifuge Mixer and Elmasonic water bath sonicator are used for nanocomposite synthesization to ensure the best dispersion of nanoparticles. A precise LCR meter with a range of frequency of 20 Hz - 2 MHz is used for measuring dielectric properties, while an AC breakdown test cell is used to measure AC breakdown voltage for each sample. Then, dielectric breakdown strength is evaluated through the Finite Element Method (FEM) by using COMSOL Multiphysics software. The results showed that improving the dielectric properties of industrial polyester insulating varnishes is possible by the incorporation of SiO 2 nanoparticles till a certain filler loading percent.