Sally Beauty is taking its insurers to court, claiming they’ve left the company on the hook for most of its legal bills in a wave of hair relaxer lawsuits.
Filed on Aug. 29 in the Eastern District of Texas, the case pits Sally Beauty Holdings, Inc. and Sally Beauty Supply LLC against The Cincinnati Insurance Company and The Cincinnati Casualty Company. At the heart of the dispute is who should pay for defending Sally Beauty in hundreds of lawsuits that have landed on its doorstep over the past couple of years.
Here’s the story: Sally Beauty, a major retailer and distributor of beauty products, says it’s been selling its own private label hair relaxers for decades, alongside other brands. These products, made by RNA Corporation, have become the subject of lawsuits across the United States and even in Canada. Plaintiffs are alleging bodily injury from using these hair relaxers, and Sally Beauty has found itself named as a defendant in hundreds of cases, including a big multidistrict litigation in Illinois.
Sally Beauty’s agreements with its manufacturers, including RNA, required those companies to defend and indemnify Sally Beauty and to make sure it was covered by liability insurance as an “additional insured.” That’s where Cincinnati Insurance comes in. The insurer issued a series of commercial general liability policies to RNA, and Sally Beauty says those policies clearly cover it as well.
When the lawsuits started piling up in 2023, Sally Beauty did what any company would do: it turned to Cincinnati Insurance for help. In June of that year, Cincinnati agreed to defend Sally Beauty, but with a catch - it reserved the right to deny coverage down the road. The insurer also agreed that Sally Beauty could pick its own lawyers, given the potential conflict of interest.
But according to Sally Beauty, that’s where the cooperation ended. The company says Cincinnati has only paid a small slice of the mounting legal bills, leaving Sally Beauty to shoulder the rest. The complaint says the insurer’s first partial payment came in June 2024, but since then, the bulk of the costs have landed on Sally Beauty’s balance sheet.
Sally Beauty’s position is straightforward: the insurance policies say Cincinnati must pay for the entire defense, not just part of it. The company argues that the insurer’s refusal to do so isn’t just wrong - it goes against the plain language of the policies. And if there’s any ambiguity, Sally Beauty says, it should be resolved in favor of coverage.
The company is also invoking the Texas Prompt Payment of Claims Act, saying Cincinnati’s delays and partial payments entitle Sally Beauty to interest and attorneys’ fees on top of the unpaid defense costs.
For insurance professionals, this case is more than just a contract squabble. It’s a real-world test of what “duty to defend” means when a policyholder faces a tidal wave of litigation. The outcome could shape how insurers handle defense obligations in large, multi-defendant cases and how they interpret policy language around additional insureds.
As of now, these are Sally Beauty’s claims, laid out in a freshly filed complaint. Cincinnati Insurance hasn’t yet had its say in court. But for anyone in the business of insuring big companies - or managing the risks that come with mass torts – this is one to watch.
