Dollar Tree is taking Cincinnati Insurance to federal court, claiming the insurer left it in the lurch after a helium tank accident at one of its stores.
On August 20, 2025, Dollar Tree Stores, Inc. filed a complaint in the US District Court for the District of Connecticut, alleging that Cincinnati Insurance Company wrongfully denied coverage for a personal injury lawsuit. The dispute centers on a commercial general liability policy that Dollar Tree says should have provided both defense and indemnity after a customer was injured by a helium tank nozzle at a Dollar Tree store in Norwalk, Connecticut.
According to the complaint, Dollar Tree entered into a Product Supply Agreement with Zephyr Solutions LLC on December 20, 2019. Zephyr agreed to supply helium products and high-pressure cylinders for use in Dollar Tree stores. The agreement required Zephyr to procure insurance, including commercial general liability coverage, naming Dollar Tree as an additional insured. Zephyr purchased a policy from Cincinnati Insurance Company, Policy No. EPP0567788, which, according to a certificate of insurance provided by Zephyr’s broker, Althans Insurance Agency, Inc., included $1 million in personal injury coverage, $2 million in products liability coverage, and $2 million in umbrella coverage for the period from February 6, 2022, through February 6, 2023.
On October 5, 2022, Norma Pellot filed a personal injury action against Dollar Tree in the Connecticut Superior Court for the Judicial District of Bridgeport. She alleged that she suffered bodily injury when a helium tank nozzle exploded and injured her hand at the Norwalk store. Dollar Tree and Zephyr provided timely notice of the lawsuit to Cincinnati and complied with all policy conditions, according to the complaint. Dollar Tree maintains it is entitled to coverage for the underlying action under the Cincinnati policy. However, Cincinnati denied coverage, refusing to provide either a defense or indemnification.
The complaint states that Cincinnati’s denial cited an exclusion in the General Liability Broadened Endorsement GA210 (09/17), which excludes coverage for bodily injury or property damage “arising out of the sole negligence of the vendor for its own acts or omissions or those of its employees or anyone else acting on its behalf.” Cincinnati asserted that the injuries and losses claimed were caused solely by the negligence of Dollar Tree and its employees, and therefore coverage was excluded. Dollar Tree disputes this, arguing that the exclusion does not apply due to evidence of negligence by Zephyr and the injured party, and that an exception to the exclusion applies for “inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products.”
The complaint further notes that Cincinnati later denied coverage on the basis that “Dollar Tree was not distributing or selling the regulator and would not be a vendor in this case.” Dollar Tree responded that it is an Automatic Additional Insured under the terms of the endorsement because Zephyr agreed in writing to provide insurance, and the underlying action alleges bodily injury arising out of the sale of helium in the regular course of Dollar Tree’s business.
Dollar Tree is seeking a judicial declaration that it has defense and indemnity coverage for the underlying action under the Cincinnati policy. The complaint also brings causes of action against Cincinnati for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the Connecticut Unfair Trade Practices and Unfair Insurance Practices Acts. Dollar Tree claims it has incurred defense costs exceeding $150,000.
This case highlights the importance of insurance policy language, additional insured endorsements, and the obligations of insurers in the context of commercial agreements. The outcome may have implications for how insurers handle coverage, exclusions, and claims involving large commercial policyholders.
As of the August 20, 2025 filing date, these are allegations from Dollar Tree’s complaint. The case is pending, and no final decision has been made.
