To start.  I like the switchback fat free shads.  They catch fish but they have some issues.  The one I would like to conquer is the finish is not very tough.  I fished with a new one today hit a piece of riprap and knocked off a chunk of finish the size of your finger nail.

Would a clear finish help?  What should the finish be?  would it effect the bait?  Would it "taste" bad and catch less fish?

Would a clear finish help?

Yes. If the finish is as bad as you say then it can help but no finish is going to be completely resistant to abuse.

What should the finish be? 

I would suggest Devcon 2 Ton's 30 minute epoxy. NOT the 5 minute formula.

http://www.amazon.com/Devcon-S-31-2-ton-Epoxy-Syringe/dp/B000VITD1I

Would it effect the bait? 

It will add a little weight. For the most part it will just slow the rise of the bait.

Would it "taste" bad and catch less fish?

No

You will want to apply two coats of the epoxy. Squirt out equal parts of the mixture to equal about the size of 50¢ piece. Mix them together thoroughly and apply an even coat to the bait. Hang it up tail down and apply the second coat the next day.

I've finished hundreds of crankbaits and assure you that no clearcoat will protect a crankbait against smacking it off rocks, including Devcon Two Ton epoxy.  Ask yourself what you are trying to accomplish.  The paint is chipped off the plastic.  Fishing it "as-is" will not hurt it further and the bass will not care about the chip.   Adding a 2nd clearcoat will not prevent future chip damage of this type.  Using epoxy takes a little skill and you need to put the bait on a lure turner (I'm guessing you don't have one) so the epoxy doesn't run while it hardens.  Sorry to say but the only true fix would be to have the crankbait stripped, repainted and re-clearcoated by a pro.  For as much as that costs, you can buy 2 Switchback Shads.  I catch lots of bass on them and think the finish is pretty durable.  I say mark it up to experience and try to aim better next time.  If the chip makes you lose confidence in the bait and you want to turn a a sow's ear into a silk purse, send it to a pro repaint service like Tim Hughes Custom Baits.

I've finished hundreds of crankbaits and assure you that no clearcoat will protect a crankbait against smacking it off rocks, including Devcon Two Ton epoxy. Ask yourself what you are trying to accomplish. The paint is chipped off the plastic. Fishing it "as-is" will not hurt it further and the bass will not care about the chip. Adding a 2nd clearcoat will not prevent future chip damage of this type. Using epoxy takes a little skill and you need to put the bait on a lure turner (I'm guessing you don't have one) so the epoxy doesn't run while it hardens. Sorry to say but the only true fix would be to have the crankbait stripped, repainted and re-clearcoated by a pro. For as much as that costs, you can buy 2 Switchback Shads. I catch lots of bass on them and think the finish is pretty durable. I say mark it up to experience and try to aim better next time. If the chip makes you lose confidence in the bait and you want to turn a a sow's ear into a silk purse, send it to a pro repaint service like Tim Hughes Custom Baits.

Thanks for the EXCELLANT advice !!!!!!!!!!!!!!

you could use epoxy or clear nail polish (about $2)... it will make it a bit heavier, but not too much. If you are worried about taste, you sould use spray attractant or other similar product

I wouldn 't worry much about loosing a piece of the finish on a crankbait, I 've got a bunch of cranks that barely resemble how they were painted originally and they still catch fish.