FCA Consumer Duty: What Tradesmen Need to Know

The Financial Conduct Authority’s (FCA) Consumer Duty came into effect in July 2023. (FCA Consumer Duty overview page).

It’s one of the biggest changes to insurance regulation in years, designed to ensure that customers receive good outcomes — not just products.

For tradesmen who rely on vans, tools, and business insurance, this means clearer information, fairer pricing, and stronger protection if something goes wrong. Here’s a practical guide to what the Duty means for you, why it matters, and how to make the most of it.

What Is the FCA Consumer Duty?

The Consumer Duty is a set of new rules that all insurers, brokers, and financial services firms must follow. The FCA introduced it to raise standards of care and remove poor practices that left customers confused or disadvantaged.

The Duty is built on four key outcomes:

1. Products & Services – insurance products must be designed to meet real customer needs.
2. Price & Value – premiums and add-ons must offer fair value, not unfair profit.
3. Consumer Understanding – documents and advice must be clear, simple, and jargon-free.
4. Consumer Support – firms must provide quick, effective help when customers need it.

Why Does It Matter for Tradesmen?

As a tradesman, your van, tools, and liability cover are essential to your livelihood. The Consumer Duty directly affects how these products are sold, explained, and supported:

• Clarity of documents – you should be able to read and understand your insurance wording without hidden clauses.
• Fair pricing – add-ons like Goods in Transit (GIT) or Tools Cover must be justifiable in cost and benefit.
• Service standards – if you need to claim or complain, your provider must respond quickly and fairly.
• Broker accountability – advisers must explain why one policy suits you better than another (e.g., Hire & Reward vs GIT).

Practical Changes You’ll Notice

• Renewal transparency – renewal letters must show last year’s price alongside this year’s premium. (FCA page on fair value/renewals guidance)
• Explanations of cover – you should be told the difference between similar policies (Car vs Van, or Social vs Business Use).
• No silent renewals – firms must give clear notice and easy ways to opt out.
• Better claims support – insurers must give regular updates and avoid unnecessary delays.

What You Should Do

• Read your renewal carefully – compare the new premium to last year’s.
• Ask questions – don’t accept jargon; under the Duty, your broker must make things clear.
• Check add-ons – are tools, replacement van, or breakdown cover giving you fair value?
• Keep records – save emails, notes, and renewal letters; they can be helpful if there’s a dispute.

Example Scenario

A builder with Hire & Reward cover is quoted £1,600 at renewal, up from £1,200. Under Consumer Duty, the broker must:

• Show the previous price clearly.
• Explain why the increase happened (e.g., claims, market-wide rises).
• Offer alternative options if available.

This gives the customer more control and transparency than before.

FAQs

What is the FCA Consumer Duty in simple terms?

It’s a new rulebook requiring insurers and brokers to treat customers fairly, with clear information, fair pricing, and proper support.

When did the Consumer Duty start?

The rules came into force on 31 July 2023, with ongoing monitoring and enforcement by the FCA. (FCA press release announcing go-live date)

Does it apply to van insurance?

Yes. It applies to all retail financial products and services, including van, car, and tradesman insurance.

How does it benefit tradesmen?

It ensures your premiums, add-ons, and claims handling are transparent and fair — protecting both your business and your livelihood.

Bottom Line

The FCA Consumer Duty shifts power towards customers. For tradesmen, it means your insurance must be clear, fair, and supportive — from the first quote to a claim.

If you’re unsure whether your current policy meets these standards, ask your broker to explain. Under the Duty, they’re required to do so in plain English

VanCompare Editorial Team

The VanCompare Editorial Team produces clear, practical insurance guides written for UK tradesmen, couriers, and small business owners. We work with FCA regulated insurance brokers and providers to translate complex insurance topics into plain English, helping drivers make informed decisions about their cover.

Our content is fact-checked against official UK sources including the FCA, GOV.UK, ABI, and MoneyHelper, ensuring accuracy and regulatory alignment.