Notice: This opinion is subject to formal revision before publication in the 

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volumes go to press. 

DISTRICT OF COLUMBIA COURT OF APPEALS

No. 20-CV-0535

ROSE’S 1, LLC, et al., APPELLANTS,

 

v.

ERIE INSURANCE EXCHANGE, APPELLEE.

Appeal from the Superior Court of the 

District of Columbia

(2020-CA-002424-B)

(Hon. Kelly A. Higashi, Trial Judge)

(Argued November 30, 2021 Decided March 2, 2023)

Michael C. Davis, with whom David L. Feinberg, Mary M. Gardner, and 

Jonathan K. Hettleman were on the brief, for appellants.

George E. Reede, with whom Jessica E. Pak was on the brief, for appellee.

Scott Levitt, with whom Georgia Kazakis, Dustin Cho, and Mark Mosier of 

Covington & Burling LLP, filed a brief on behalf of Local Restaurants Insured by 

Erie Insurance Exchange as amicus curiae. 

Lorelie S. Masters, with whom Geoffrey B. Fehling and Latosha M. Ellis of 

Hunton Andrews Kurth, LLP, filed a brief on behalf of United Policy Holders and 

National Independent Venue Association as amicus curiae.

Laura A. Foggan of Crowell & Moring LLP filed a brief on behalf of The 

American Property Casualty Insurance Association and National Association of 

Mutual Insurance Companies as amicus curiae.
2

Victoria S. Nugent, with whom Andrew N. Friedman, Julie Selesnick, 

Geoffrey Graber, and Karina G. Puttieva of Cohen Milstein Sellers & Toll PLLC,

Andre M. Mura, of Gibbs Law Group LLP, and Angelo I. Amador of Restaurant Law 

Center, filed a brief on behalf of Restaurant Association of Metropolitan Washington 

and Restaurant Law Center as amicus curiae.

Before BLACKBURNE-RIGSBY, Chief Judge, BECKWITH, Associate Judge, and 

THOMPSON,

∗ Senior Judge.

BLACKBURNE-RIGSBY, Chief Judge: Several restaurants and food service 

businesses1 in the District of Columbia are appealing a summary judgment ruling in 

favor of appellee, Erie Insurance Exchange (“Erie”). The trial court determined that 

the Erie Ultrapack Plus Policy (“Policy”) held by appellants throughout the COVID19 pandemic did not provide coverage for the loss of use of their businesses due to 

the pandemic and governmental shutdown orders. Appellants are seeking reversal 

and a determination that they are entitled to insurance coverage for lost income and 

extra expenses associated with the COVID-19 pandemic and mayoral orders, which 

appellants assert resulted in the direct loss of use of their properties to operate their 

businesses. We affirm the grant of summary judgment. 

 ∗ Judge Thompson was an Associate Judge of the court at the time of 

argument. She began her service as a Senior Judge on February 18, 2022.

1 Rose’s Luxury, Pineapple and Pearls, Little Pearl, Buttercream Bakeshop, 

Gravitas, Karma Modern Indian, Purple Patch, El Chucho, Bar Charley, La Vie, 

Queen’s English, Beuchert’s Saloon, Service Bar, and Maketto. 
3

I. Factual & Procedural History

A. COVID-19 Pandemic

Between March 11 and 13, 2020, the World Health Organization (“WHO”) 

declared a global pandemic as a result of the spread of COVID-19.

2

 In response,

Mayor Muriel Bowser of the District of Columbia declared a public health 

emergency due to COVID-19 on March 11, 2020.3

 Next, on March 16, 2020, Mayor 

Bowser issued a mandatory order prohibiting “table seating” at restaurants, bars, and 

taverns operating in the District.4

 By March 24, 2020, the severity of the pandemic

had grown, and Mayor Bowser ordered the closure of all non-essential businesses, 

 2 Timeline: WHO’s COVID-19 Response, World Health Org., 

https://www.who.int/emergencies/diseases/novel-coronavirus-2019/interactivetimeline; https://perma.cc/GLJ4-3H8B (last visited February 13, 2023).

3 Mayor’s Order 2020-045: Declaration of Public Health Emergency –

Coronavirus (COVID-19), Exec. Off. of the Mayor (Mar. 11, 2020), 

https://mayor.dc.gov/sites/default/files/dc/sites/mayormb/release_content/attachme

nts/MO.DeclarationofPublicEmergency03.11.20.pdf; https://perma.cc/52FS-VLJ5. 

4 Mayor’s Order 2020-048: Prohibition on Mass Gatherings During Public 

Health Emergency – Coronavirus (COVID-19), Exec. Off. of the Mayor (Mar. 16, 

2020), 

https://mayor.dc.gov/sites/default/files/dc/sites/mayormb/publication/attachments/ 

MO-Prohibition-on-Mass-Gatherings-During-Public-Health-Emergency.pdf; 

https://perma.cc/AUU9-ZT95.
4

which included restaurants and bars.5 Several days later, on March 30, 2020, the 

Mayor issued a stay-at-home order, directing the residents of the District to stay at 

home except for limited essential purposes, which did not include dining at 

restaurants.6

 As the pandemic continued, to ensure public safety, the Mayor 

extended the orders closing all non-essential businesses and requiring residents to

stay at home.

The reopening of the District of Columbia occurred in phases. During Phase 

I, Mayor Bowser lifted the stay-at-home order, and, with respect to dining 

establishments, allowed restaurants to offer limited outdoor dining services.

7

 In 

Phase II, restaurants and bars were permitted to open with limited seating and 

 5 Mayor’s Order 2020-053: Closure of Non-Essential Businesses and 

Prohibition on Large Gatherings During Public Health Emergency for the 2019 

Novel Coronavirus (COVID-19), Exec. Off. of the Mayor (Mar. 24, 2020), 

https://coronavirus.dc.gov/sites/default/files/dc/sites/mayormb/release_content/atta

chments/Mayor%27s%20Order%202020-053%20Closure%20of%20NonEssential%20Businesses%20and%20Prohibiti....pdf; https://perma.cc/T56N-UZP3.

6 Mayor’s Order 2020-054: Stay at Home Order, Exec. Off. Of the Mayor 

(Mar. 30, 2020), https://mayor.dc.gov/release/mayor-bowser-issues-stay-homeorder; https://perma.cc/BWQ4-Y9ZR.

7 Mayor’s Order 2020-067: Phase One of Washington, DC Reopening, Exec. 

Off. of the Mayor (May 27, 2020), 

https://coronavirus.dc.gov/sites/default/files/dc/sites/coronavirus/page_content/atta

chments/MO2020-067.pdf; https://perma.cc/UZ72-VS7X.
5

socially-distanced indoor dining.

8

 Mayor Bowser ordered the end of the public 

health emergency on July 24, 2021, to take effect July 25, 2021.

9 After subsequent 

extensions, the public emergency ended on April 16, 2022.10

B. The Policy

Prior to and throughout the COVID-19 pandemic, appellants were insured by 

Erie, each having previously acquired the Policy insurance package. With regard to 

coverage, the Policy states that Erie “will pay for direct physical ‘loss’ of or damage 

to Covered Property at the premises described in the ‘Declarations’ caused by or 

 8 Mayor’s Order 2020-075: Phase Two of Washington, DC Reopening, Exec. 

Off. of the Mayor, (June 19, 2020), 

https://coronavirus.dc.gov/sites/default/files/dc/sites/coronavirus/page_content/atta

chments/Mayors-Order-2020-075-06-19-20.pdf; https://perma.cc/VSJ3-HQVX.

9 Mayor’s Order 2021-096: End of Public Health Emergency and Extension 

of Public Emergency, Exec. Off. of the Mayor, (July 24, 2021), 

https://coronavirus.dc.gov/sites/default/files/dc/sites/coronavirus/page_content/atta

chments/Mayors-Order-2021-096.pdf; https://perma.cc/TUJ8-TNWV.

10 Mayor’s Order 2022-043: Extension of Public Emergency for COVID-19,

Exec. Off. of the Mayor, (Mar. 17, 2022),

https://coronavirus.dc.gov/sites/default/files/dc/sites/coronavirus/page_content/atta

chments/2022-043_Extension_of_Public_Emergency_for_COVID-19.pdf; 

https://perma.cc/H89C-4W6U.
6

resulting from a peril insured against.”11 The Policy included three types of 

coverage: (1) building coverage, (2) personal property coverage, and (3) Income 

Protection and Extra Expense coverage (referred to in the Policy as “Coverage 3”). 

Appellants opted to purchase additional Income Protection and Extra Expense

coverage as part of their Policy with Erie. The sole issue on appeal pertains to the 

interpretation of the Income Protection and Extra Expense coverage under the 

Policy. 

Per the Policy, Income Protection “insures against direct physical ‘loss[,]’ 

except ‘loss’ as excluded or limited in this policy.”12 As defined by the Policy, 

“Income Protection” means 

loss of “income” and/or “rental income” you sustain due 

to partial or total “interruption of business” resulting 

directly from “loss” or damage to property on the premises

described in the “Declarations” from a peril insured 

against. “Loss” or damage also includes covered property 

in the open, or in a vehicle, on the premises described in 

the “Declarations” or within 1,500 feet thereof. If you are 

a tenant, your premises are the portion of the building 

described in the “Declarations” which:

1. You rent, lease, or occupy;

 11 Section III of the Policy includes an extensive list of exclusions.

12 Some examples of excluded losses under the Policy are: deterioration or 

depreciation, intentional loss, earth movement (earthquakes, tremors, landslides, 

etc.), volcanic action, war, seizure or destruction by order of government, etc. Erie 

does not argue that there is an express virus or pandemic exclusion in the Policy.
7

2. All routes within the building that service or are 

used to gain access to the described premises; and

3. The area within 1,500 feet of the premises described

in the “Declarations” (with respect to “loss” or damage to 

covered property in the open or in a vehicle).

You are required to resume normal business operations as 

promptly as possible and shall use all available means to 

eliminate any unnecessary delay. 

“Extra Expense” is defined as 

necessary expenses you incur due to partial or total 

“interruption of business” resulting directly from “loss” or 

damage to property on the premises described in the 

“Declarations” from a peril insured against. “Loss” or 

damage also includes property in the open, or in a vehicle, 

on the premises described in the “Declarations” or within 

1,500 feet thereof. 

The Policy defines “interruption of business” as “the period of time that a 

business is partially or totally suspended . . . [b]egin[ning] with the date of direct 

‘loss’ to covered property caused by a peril insured against” and “[e]nd[ing] on the 

date when the covered property should be repaired, rebuilt, or replaced with 

reasonable speed and similar quality.” 

The Policy states that Erie 

will pay necessary actual and necessary “extra expenses”

(other than the expense to repair or replace property) 

sustained by you to: . . . [a]void or minimize the 
8

“interruption of business” and to continue your business 

operations . . . . [and] [m]inimize the “interruption of 

business” if you cannot continue your business operations 

to the extent it reduces the amount of loss that would have 

been payable under loss of “income” . . . . 

Under the Income Protection and Extra Expense provisions of the Policy, the term 

“loss” is defined as “direct and accidental loss of or damage to covered property.” 

C. Trial Court Litigation

Appellants timely filed claims with Erie seeking coverage under their 

respective policies for lost income and extra expenses caused by their required 

closures and reduced operations due to the COVID-19 pandemic. Erie denied the 

claims, citing a lack of “direct physical loss to [appellants’] building[s].” Following 

the denial of their claims, appellants filed a complaint in Superior Court seeking 

declaratory judgment that their claims were covered by their insurance contracts 

with Erie. With only the respective parties’ differing interpretations of the Policy in 

dispute, appellants filed a motion for expedited summary judgment, and appellees 

filed a cross-motion for summary judgment. 
9

Appellants argued that under the plain language of the Income Protection 

coverage of the Policy, they were insured for the loss of use of their properties as a 

result of a direct physical loss, which they assert took place through the forced 

closure of their businesses due to the COVID-19 pandemic. Appellants also argued 

that because the Policy did not explicitly exclude coverage for loss of use or exclude 

coverage due to a virus, then the Policy covers their loss of income due to the 

pandemic. Erie in response argued that the Policy is not ambiguous and absent any 

physical loss or damage to appellants’ properties, mere loss of income was not 

covered under the Policy. 

The trial court denied appellants’ summary judgment motion and granted 

Erie’s cross-motion for summary judgment. The trial court determined that pursuant 

to the Policy, the mayoral orders “did not [affect] any direct changes to the 

properties” to constitute a “direct physical loss.” The trial court rejected appellants’ 

argument that because the Policy defined “loss” as “direct and accidental loss of or 

damage to covered property,” the clause “loss of” must be treated as distinct from 

“damage,” and “loss of” would therefore incorporate “loss of use” and not 

necessarily be limited to physical damage. The trial court held that “under a natural 

reading of the term ‘direct physical loss,’ the words ‘direct’ and ‘physical’ modify 
10

the word ‘loss;’” and therefore, any loss of use must be caused by “a direct physical 

intrusion on to the insured property.” 

The trial court noted that cases cited by appellants, Gregory Packaging, Inc. 

v. Travelers Prop. Cas. Co. of Am., 2014 U.S. Dist. LEXIS 165232, at *13-19 

(D.N.J. Nov. 25, 2014), and W. Fire Ins. Co. v. First Presbyterian Church, 437 P.2d 

52, 55 (Colo. 1968), did not “stand for the proposition that a governmental edict, 

standing alone, constitute[d] a direct physical loss under an insurance policy.” In 

addition, the trial court looked to our holding in Bros. Inc. v. Liberty Mut. Fire Ins.

Co., 268 A.2d 611, 613 (D.C. 1970), where we interpreted the term “direct loss” to 

mean “a loss proximately resulting from physical damage to the property or contents 

caused by a riot or civil commotion.” The trial court also reasoned that appellants 

did not show that COVID-19 was actually present on the insured properties or that 

the Mayor’s orders had “any effect on the material or tangible structure of the insured 

properties.” As such, the trial court concluded that the Mayor’s orders were not a 

physical intrusion on the properties, and the Policy did not provide coverage for 

appellants’ loss of income as a result of the Mayor’s shutdown orders. This appeal 

followed.
11

II. Discussion

On appeal, appellants argue that (1) the trial court erroneously determined that 

COVID-19 or the mandatory shutdown orders were not the direct cause of their 

losses, absent some “direct change to the property”; (2) Erie’s proposed 

interpretation of the Policy conflates the distinct meanings of “loss” and “damage” 

to mean only physical damage, rejecting that “loss of use” is also a “direct physical 

loss”; and (3) the Policy “requires coverage for all business interruption losses 

unless they are clearly and unambiguously excluded.” In response, Erie asserts that 

“loss of use” is not a “direct physical loss” and that a “direct physical loss” requires 

some type of change to the physical condition of the properties. 

For the reasons we discuss, we affirm the trial court’s grant of summary 

judgment to Erie. First, we conduct a brief survey of the state of COVID-19 business 

interruption litigation. Then, we look at the Policy at issue. We conclude that “loss 

of use” of appellants’ properties as a result of Mayor Bowser’s shutdown orders is 

not a “direct physical loss” that invokes Income Protection coverage. 
12

A. COVID-19 Business Interruption Litigation

Courts across the country have dealt with whether the COVID-19 business 

closures constitute “direct physical loss of or damage to” property, such that the 

businesses’ losses are covered by income-protection coverage.

13 Conducting a 

broad survey of the caselaw across state and federal courts, the Eleventh Circuit 

concluded that the “majority view” is that “some tangible alteration of the property 

is required.” SA Palm Beach, LLC v. Certain Underwriters at Lloyd’s London, 32 

F.4th 1347, 1358 (11th Cir. 2022) (collecting cases). As the Seventh Circuit 

explained, 

The phrase is “direct physical loss or damage.” The words 

“direct physical” are most sensibly read as modifying both 

“loss” and “damage.” But even if they can be divorced 

from “damage” (and we do not think that they can), they 

indisputably modify “loss.” Any other interpretation 

would commit the same sin against which the Businesses 

caution us—namely making surplusage out of the word 

“physical.” Whatever “loss” means, it must be physical in 

nature.

Sandy Point Dental, P.C. v. Cincinnati Ins. Co., 20 F.4th 327, 332 (7th Cir. 2021)

(applying Illinois law). Given this language, 

 13 The parties have filed several Rule 28(k) letters, directing the court to 

litigation across the country. We thank the parties for keeping the court abreast of 

updates in COVID-related business interruption cases. 
13

The requirement that the loss be “physical,” given the 

ordinary definition of that term, is widely held to exclude 

alleged losses that are intangible or incorporeal and, 

thereby, to preclude any claim against the property insurer 

when the insured merely suffers a detrimental economic 

impact unaccompanied by a distinct, demonstrable, 

physical alteration of the property.

SA Palm Beach, LLC, 32 F.4th at 1358 (quoting Steven Plitt et al., 10A Couch on 

Insurance § 148:46 (3d ed. & Dec. 2021 update)). Thus, most courts have concluded 

that there is “no coverage for loss of use based on intangible and incorporeal harm 

to the property due to COVID-19 and the closure orders that were issued by state 

and local authorities even though the property was rendered temporarily unsuitable 

for its intended use.” Id.

14 

 14 E.g., Wilson v. USI Ins. Serv. LLC, 57 F.4th 131, 138 (3d Cir. 2023)

(applying Pennsylvania and New Jersey law); Uncork & Create LLC v. Cincinnati 

Ins. Co., 27 F.4th 926, 932 (4th Cir. 2022) (applying West Virginia law); Q Clothier 

New Orleans, L.L.C. v. Twin City Fire Ins. Co., 29 F.4th 252, 258-59 (5th Cir. 2022)

(applying Louisiana law); Cherokee Nation v. Lexington Ins. Co., 521 P.3d 1261, 

1267 (Okla. 2022); Monday Restaurants v. Intrepid Ins. Co., 32 F.4th 656, 658 (8th

Cir. 2022) (applying Missouri law); Wakonda Club v. Selective Ins. Co. of Am., 973 

N.W.2d 545, 553 (Iowa 2022); 10012 Holdings, Inc. v. Sentinel Ins. Co., 21 F.4th 

216, 220-21 (2nd Cir. 2021) (applying New York law); Santo’s Italian Café LLC v. 

Acuity Ins. Co., 15 F.4th 398, 402 (6th Cir. 2021) (applying Ohio law). 
14

A small number of courts have determined that similar policy language is 

susceptible to more than one reasonable interpretation.

15 The Eastern District of 

Virginia explained that “‘direct physical loss’ has been subject to a spectrum of 

interpretations in Virginia . . . . Based on the case law, the [c]ourt finds that it is 

plausible that a fortuitous ‘direct physical loss’ could mean that the property is 

uninhabitable, inaccessible, or dangerous to use because of intangible, or nonstructural, sources.” Elegant Massage, LLC v. State Farm Mut. Auto. Ins. Co., 506 

F. Supp. 3d 360, 373-76 (E.D. Va. 2020); see also In re Soc’y Ins. Co. COVID-19 

Bus. Interruption Prot. Ins. Litig., 521 F. Supp. 3d 729, 742-43 (N.D. Ill. 2021)

 15 E.g., Cajun Conti LLC v. Certain Underwriters at Lloyd’s, London, 2022 

WL 2154863, at *6-8 (La. Ct. App., June 15, 2022); Risinger Holdings, LLC v. 

Sentinel Ins. Co., Ltd., 565 F. Supp. 3d 844, 863-64 (E.D. Tex. 2021) (applying 

Texas law); McKinley Dev. Leasing Co. v. Westfield Ins. Co., 2021 WL 8084485, at 

*4-5 (Ohio C.P. Oct. 14, 2021); see also Snoqualmie Ent. Auth. v. Affiliated FM Ins. 

Co., 2021 WL 4098938, at *4-6 (Wash. Super. Ct. Sept. 3, 2021) (the phrase “all 

risks of physical loss or damage” is undefined and ambiguous).

The Pennsylvania Superior Court has come to differing conclusions

depending on the policy at issue. In Ungarean v. CNA & Valley Forge Ins. Co., 286 

A.3d 353, 360-61 (Pa. Super. Ct. 2022), the court determined that an interpretation 

that “loss of the use of [a] dental practice due to COVID-19 and the governmental 

orders equated to a direct physical loss of [the] property” is reasonable. However, 

in MacMiles, LLC v. Erie Ins. Exch., 286 A.3d 331, 340 (Pa. Super. Ct. 2022), in 

which the court examined the Erie Ultrapack Plus policy, the court determined that

“where the alleged property damage is invisible (as is the possible presence of 

Covid-19 on surfaces), it does not qualify as physical damage for purposes of a 

commercial property insurance policy.”
15

(denying summary judgment because “the scope of the term ‘direct physical loss’ is 

genuinely in dispute”).

Finally, a few courts have recognized a type of “physical damage or loss” 

where there are “odors, bacteria, and other imperceptible agents . . . if [their] 

presence renders the structure uninhabitable or unusable, or essentially destroys its 

functionality.” SWB Yankees, LLC v. CNA Financial Corp., 2021 WL 3468995, at 

*17 (Pa. C.P. Aug. 4, 2021).

16 “In order for an insured to sustain a claim of physical 

loss or damage based upon the contamination theory . . . , the insured must expressly 

aver that the coronavirus was present on its covered property.” Id. at *19 (collecting 

cases).

17

 16 Port Auth. of N.Y. & N.J. v. Affiliated FM Ins. Co., 311 F.3d 226, 236 (3d 

Cir. 2002) (presence of asbestos could constitute a “physical loss” if it “result[s] in 

contamination of the property such that its function is nearly eliminated or destroyed, 

or the structure is made useless or uninhabitable,” because the “effect of asbestos 

fibers in such quantity is comparable to that of fire, water or smoke on a structure’s 

use and function.”); W. Fire Ins. Co., 437 P.2d at 54 (gasoline seeping into a 

building, making it uninhabitable, could constitute “direct physical loss”).

17 E.g., Huntington Ingalls Indus., Inc. v. Ace Am. Ins. Co., 287 A.3d 515, 527-

28 (Vt. 2022) (a “distinct, demonstrable, physical alteration need not necessarily be 

visible; alterations at the microscopic level may meet this threshold” but it “is

essential that the allegations involve more than just a government order interfering 

with insured’s use of its property”); Mudpie, Inc. v. Travelers Cas. Ins. Co. of Am., 

487 F. Supp. 3d 834, 841 n.7 (N.D. Cal. 2020) (“Had [the insured] alleged the 

presence of COVID-19 in its store, the Court’s conclusion about an intervening 

physical force would be different.”), aff’d, 15 F.4th 885 (9th Cir. 2021). 
16

B. This Case

Like other courts, we are tasked with determining whether appellants have 

alleged a “direct physical loss of or damage to Covered Property.” We determine 

that they have not. “Direct physical loss of or damage” requires a tangible, material 

alteration or change to covered property. We make this determination through a 

plain reading of “direct physical loss of or damage” and a harmonized reading of the 

Income Protection coverage provisions. “Direct physical loss of or damage” does 

not include a loss of use, and coverage of “all risks” does not mean that coverage 

can be extended beyond the Policy’s terms. Because appellants have not alleged a 

tangible change or alteration to their properties, they have not shown “physical loss 

of or damage to Covered Property” as required by the Policy. 

 

California courts seem to be split on whether the allegation of COVID-19 in 

a business could constitute direct physical loss. See Another Planet Ent., LLC v. 

Vigilant Ins. Co., 56 F.4th 730, 734 (9th Cir. 2022) (acknowledging a split in 

California authority and certifying a question to the California Supreme Court on 

whether “the allegation of the presence or potential presence of the COVID-19 virus 

is sufficient to show ‘direct physical loss or damage to property’”). 
17

We review a trial court’s order granting summary judgment de novo, 

assessing whether summary judgment was appropriately granted because there was 

no genuine issue of material fact and the judgment is warranted as a matter of law. 

Liu v. U.S. Bank N.A., 179 A.3d 871, 876 (D.C. 2018). In our assessment, we must 

construe “the evidence in the light most favorable to the non-prevailing party and 

we draw all reasonable inferences in that party’s favor.” Id. “An insurance policy 

is a contract that this court construes according to contract principles,” Fogg v. Fid. 

Nat’l Title Ins. Co., 89 A.3d 510, 514 (D.C. 2014), and “[c]ontractual interpretation 

is a legal question, which this court reviews de novo,” District of Columbia v. D.C. 

Contract Appeals Bd., 145 A.3d 523, 530 (D.C. 2016). 

We examine an insurance policy on its face, first assessing the plain language 

used. District of Columbia v. Young, 39 A.3d 36, 40 (D.C. 2012); see also Carlyle 

Inv. Mgmt. L.L.C. v. Ace Am. Ins. Co., 131 A.3d 886, 896 (D.C. 2016). We must 

strive to give “reasonable effect to [the contract’s] parts” and avoid an interpretation 

that would render any part of it “meaningless or incompatible” with the policy as a 

whole. Young, 39 A.3d at 40. When interpreting a contract, “we must determine 

how a reasonable person in the [parties’] position . . . would understand the disputed 

provision and honor their expressed intentions.” Hossain v. JMU Props., LLC, 147 

A.3d 816, 820 (D.C. 2016). Summary judgment can be appropriate where an 
18

insurance contract’s language is not ambiguous “because a written contract duly 

signed and executed speaks for itself and binds the parties without the necessity of 

extrinsic evidence.” Stevens v. United Gen. Title Ins. Co., 801 A.2d 61, 66 (D.C. 

2002) (cleaned up). However, if an insurance policy “is reasonably open to two 

constructions, the [construction] most favorable to the insured will be adopted.” 

Carlyle Inc. Mgmt. LLC, 131 A.3d at 895 (internal quotations omitted). 

1. “Direct Physical Loss”

We first turn to the Policy’s language. The Policy covers “direct physical 

‘loss’ of or damage to Covered Property.” The Policy defines “loss” as “direct and 

accidental loss of or damage to covered property.”18 The Policy does not define 

“direct physical loss” itself; thus, we must give these terms their plain meaning. See 

Carlyle Inc. Mgmt. LLC, 131 A.3d at 895. Importantly, both “direct” and “physical” 

modify “loss.” “Direct,” as commonly understood and as relevant here, generally 

means “marked by absence of an intervening agency.” Direct, Merriam-Webster 

Dictionary, https://www.merriamwebster.com/dictionary/direct; 

 18 Given this circular definition of “loss,” we keep in mind the common 

understanding of the term, which is “the act or fact of being unable to keep or 

maintain something” or “partial or complete deterioration.” Loss, Merriam-Webster 

Dictionary, https://www.merriamwebster.com/dictionary/loss; 

https://perma.cc/27S5-T2K2 (last visited February 10, 2023). 
19

https://perma.cc/GXM5-SH75 (last visited February 10, 2023). “Physical,” as 

commonly understood, generally means “having material existence: perceptible 

especially through the senses and subject to the laws of nature.” Physical, MerriamWebster Dictionary, https://www.merriamwebster.com/dictionary/physical; 

https://perma.cc/F4PE-FAA5 (last visited February 10, 2023). It must be “[o]f, 

relating to, or involving material things” or “pertain[] to real, tangible objects.” 

Physical, Black’s Law Dictionary (11th ed. 2019).

Taking the Policy at face value, then, we conclude that the loss of covered 

property must be tangible and material. It must be perceptible, a physical alteration 

or change. E.g., Oral Surgeons, P.C. v. Cincinnati Ins. Co., 2 F.4th 1141, 1144 (8th 

Cir. 2021) (“[T]here must be some physicality to the loss or damage of property—

e.g., a physical alteration, physical contamination, or physical destruction.”);

Mudpie, Inc. v. Travelers Cas. Ins. Co. of Am., 15 F.4th 885, 891 (9th Cir. 2021)

(“[F]or loss to be covered, there must be a distinct, demonstrable, physical alteration 

of the property.”) (internal quotations and citations omitted)). We find persuasive 

the reasoning that the “presence of the words ‘direct’ and ‘physical’ limit the words 

‘loss’ and ‘damage’ and unambiguously require that the loss be directly tied to a 

material alteration to the property itself, or an intrusion onto the insured property.” 
20

Promotional Headwear Int’l v. Cincinnati Ins. Co., 504 F. Supp. 3d 1191, 1202 (D. 

Kan. 2020) (emphasis added). 

Additionally, we view the Policy in light of all of its provisions, which support 

an interpretation that “direct physical loss” of property must be tangible or material.

Throughout the Policy, the interaction between “loss” and “interruption of business” 

supports the conclusion that in order to have a qualifying “loss,” the property must 

be “repaired, rebuilt, or replaced.” The Policy provides that “Income Protection” 

protects an insured from “loss of ‘income’ and/or ‘rental income’” sustained “due to 

partial or total ‘interruption of business’ resulting directly from ‘loss’ or damage to 

property on the premises.” (emphasis added). Coverage is predicated on a period 

of interruption that is calculable from “the date of direct ‘loss’ to covered property 

caused by a peril insured against; and [ending] on the date when the covered property 

should be repaired, rebuilt, or replaced with reasonable speed and similar quality.” 

(emphasis added). 

Thus, based on the language of the Policy and how “loss” due to an 

“interruption of business” is calculated to ascertain the period of coverage, some 

type of physical damage, alteration, change, or decimation is required in order to 

repair, rebuild, and replace. 
21

2. “Loss of Use”

Appellants argue that “loss of use” of their businesses constitutes “direct 

physical loss,” and that the disjunctive “or” in “direct physical loss of or damage” 

means that “loss” must be differentiated from “damage.” But a loss of use, without 

more, would fail to meet the requirement that the loss be “physical” in nature.

Appellants contend that because “loss” is defined as “direct and accidental 

loss of or damage,” it is unclear what “loss” means; thus, the court should interpret 

it according to its plain meaning—which could include “loss of use.” But both 

“direct” and “physical” modify “loss” in the Policy. Additionally, the definition of 

“interruption of business,” which requires a degree of physical restoration or 

replacement of the property, makes clear what constitutes a “loss” warranting 

Income Protection coverage.

Appellants further highlight that the Income Protection section of the Policy 

does not define “damage.” Appellants ask us to look to the Erie “Commercial 

General Liability Coverage Form,” and apply the definition given to “property 

damage” therein, which includes “loss of use.” The Commercial General Liability 
22

Coverage Form covers “sums that the insured becomes legally obligated to pay as 

damages because of ‘bodily injury’ or ‘property damage’ to which this insurance 

applies.” “Property damage” is defined in the “Commercial General Liability 

Coverage Form” as:

a. Physical injury to tangible property, including all 

resulting loss of use of that property. All such loss of use 

shall be deemed to occur at the time of the physical injury 

that caused it; or

b. Loss of use of tangible property that is not physically 

injured. All such loss of use shall be deemed to occur at 

the time of the ‘occurrence’ that caused it.

At issue here is the Ultrapack Plus Policy, not general liability coverage, 

which does not include the term “property damage.” We are not persuaded that we 

should impute the special meaning of “property damage” found within the 

“Commercial General Liability Coverage Form” to the term “damage” used in the 

Policy without explicit language permitting such extension. Most convincingly, 

both the Ultrapack Plus Policy and the general liability coverage form specify that 

“words and phrases that appear in quotation marks have special meaning.” Section 

V contains the special definitions for the “Commercial General Liability Coverage 

Form,” and Sections XI and VIII contain the special definitions for the Policy. 

Under the “Commercial General Liability Coverage Form,” “property damage” has 

a special meaning, as it appears in quotation marks. But the term “damage” in the 
23

Policy is not contained in quotation marks. Therefore, the Policy does not have an 

applicable special meaning. Moreover, appellant has not pointed to, and we are 

unable to find, language in either the “Commercial General Liability Coverage 

Form” or the Policy, allowing for the extension of specific definitions between the 

different policy parts. 

The government edicts prevented appellants from accessing and using their 

properties to operate their respective businesses. However, there was no loss that 

required repairing, rebuilding, or replacement, completion of which would 

determine when Income Protection coverage would end. Appellants do not allege 

that the Mayor’s orders had any effect on the physical structures or interiors of the 

properties. Absent any physical change to the property, which requires corrective 

action of a physical nature, loss of use is not a “direct physical loss” which warrants 

coverage under the Policy. 

Appellants remind us that ambiguous insurance contracts are construed in 

favor of the insured. Before the trial court, both parties argued that the plain 

language of the Policy was unambiguous, and normally, our review would be limited 

to that framing. Vessels v. District of Columbia, 531 A.2d 1016, 1019 (D.C. 1987); 

Jordan v. United States, 235 A.3d 808, 828 (D.C. 2020) (Easterly, J., concurring). 
24

Regardless, beyond quoting the axiom about construing ambiguous insurance 

contracts in favor of the insured, appellants make no real argument that the Policy is 

ambiguous. Instead, they assert several times, as they did to the trial court, that the 

Policy’s coverage is “unambiguous.” 

Additionally, contracts are not ambiguous simply because the parties disagree 

as to how a contract should be construed or interpreted. Bolton v. Crowley, 110 A.3d 

575, 587 (D.C. 2013) (quoting Burbridge v. Howard Univ., 305 A.2d 245, 247 (D.C. 

1973)). There is no ambiguity here. Instead, based on the plain reading of the Policy 

and a harmonized reading of its provisions, a “direct physical ‘loss’ of or damage to 

Covered Property” requires a tangible change or alteration to the property. 

3. “All Risk”

Appellants next argue that the Policy is an “all risk” insurance policy that

“requires coverage for all business interruption losses unless they are clearly and 

unambiguously excluded.” Appellants assert that because the Policy “insures 

against direct physical ‘loss’, except ‘loss’ as excluded or limited in this policy,” in 
25

the absence of a virus or pandemic exclusion, the Policy covers loss of use due to 

the pandemic. 

Coverage of “‘all risks’ does not mean ‘every risk.’” Port Auth. of N.Y. & 

N.J., 311 F.3d at 234. “The term ‘all-risk’ has been said to be ‘somewhat 

misleading’” as “‘[a]ll-risk’ is not synonymous with ‘all loss.’” Intermetal 

Mexicana, S.A. v. Ins. Co. of N. Am., 866 F.2d 71, 75 (3d Cir. 1989). “A loss which 

does not properly fall within the coverage clause cannot be regarded as covered 

thereby merely because it is not within any of the specific exceptions . . . .” Port 

Auth. of N.Y. & N.J., 311 F.3d at 234 (quoting 10 Couch on Insurance § 148:48 (3d 

ed. 1998)); see also, e.g., Doherty v. Allstate Indem. Co., 734 F. App’x 817, 821 (3d 

Cir. 2018) (explaining that where an all-risk policy covered “sudden and accidental

direct physical loss to [the] propert[ies],” damage to a property that was no more 

than “wear and tear and general lack of maintenance” fell outside of the ambit of the 

policy). Although the Policy here does not include a specific virus or pandemic 

exclusion, no other clause extends coverage to loss of use absent a physical 

impediment to the property. Therefore, even with the Policy being coined an “allrisk” insurance policy, there is no clause covering loss of use as a result of the 

Mayor’s COVID-19 orders. 
26

4. Other Jurisdictions

Finally, we note that we join the majority of other courts in determining that 

“direct physical loss of or damage to property” requires some sort of tangible, 

material alteration, which does not include “loss of use.” See In re Erie COVID-19 

Bus. Interruption Prot. Ins. Litig., 2022 WL 7933018, at *14-22 (W.D. Pa. Oct. 14, 

2022) (collecting cases). “Nearly all courts addressing this issue have held that 

economic loss unaccompanied by a physical alteration to the property does not 

trigger coverage under a commercial property insurance policy.” MacMiles, LLC, 

286 A.3d at 335.

Appellants do direct our attention to a few cases where the court found that 

the policy at issue was ambiguous or susceptible to multiple reasonable 

interpretations.19 Our review must be focused on the language of the specific 

 

19 E.g., Elegant Massage, LLC, 506 F. Supp. 3d at 373 (policy was ambiguous 

where “direct physical loss” was “subject to a spectrum of interpretations in Virginia

on a case-by-case basis”); Snoqualmie Ent. Auth., 2021 WL 4098938, at *4 (one 

reasonable interpretation of the undefined phrase “all risks of physical loss or 

damage” is the risk that an insured is “deprived of the ability to physically use” 

property); In re Soc’y Ins. Co. COVID-19 Bus. Interruption Prot. Ins. Litig., 521 F. 

Supp. 3d at 742 (endorsing the theory that “loss of use” could constitute “physical 

loss” and thus, a reasonable jury could find that the insured suffered a “direct 

physical loss”); see also Regents of the Univ. of Colo. v. Factory Mut. Ins. Co., 2022 

Colo. Dist. LEXIS 1, *8 (D. Colo. January 26, 2022) (explaining that when “the 
27

contract at issue and the language it uses. See Young, 39 A.3d at 40. Here, the Policy 

is unambiguous. Additionally, we note that other courts have examined the same 

Erie Ultrapack Plus Policy and have concluded that mandated business closures due 

to COVID-19, without more, did not cause the requisite “loss” under the Policy. See 

In re Erie COVID-19 Bus. Interruption Prot. Ins. Litig., 2022 WL 7933018, at *34.

In other cases, the court found that allegations that COVID-19 was actually

present on the premises were sufficient to survive the motion-to-dismiss stage.20 But 

a claim under this type of “contamination theory” requires “express[] aver[ment]” 

that COVID-19 was present. SWB Yankees, LLC, 2021 WL 3468995, at *19. 

Appellants did not argue this type of contamination theory to the trial court.

21

 

phrase ‘physical loss or damage’ is not preceded by the modifier ‘direct,’” then an 

interpretation that “physical loss” can include “inability to maintain a presence on 

the property,” with no requirement of structural alteration, is more reasonable).

20 E.g., Blue Springs Dental Care, LLC v. Owners Ins. Co., 488 F. Supp. 3d 

867, 877 (W.D. Mo. 2020); Dino Palmieri Salons, Inc. v. State Auto. Mut. Ins. Co., 

2020 WL 7258114, at *5 (Ohio C.P. Nov. 17, 2020). 

21 Additionally, without further argument and consideration, we could not say 

that the allegation of active presence of COVID-19 in a business constitutes “direct 

physical loss or damage.” See, e.g., W. Fire Ins. Co., 437 P.2d at 39 (there was 

“physical loss” where the “accumulation of gasoline . . . so infiltrated and saturated” 

a premises as to make it “uninhabitable”); Port Auth. of N.Y. & N.J., 311 F.3d at 236 

(presence of asbestos was not “physical loss or damage” unless it was present in such 

quantities so as to make the building “uninhabitable”). 
28

We sympathize with appellants for the losses they experienced and may 

continue to experience due to the COVID-19 pandemic. But we must construe the 

Policy as written. Mayor Bowser’s orders limiting appellants’ use of their properties 

did not occasion direct physical loss of property that entitles appellants to coverage 

under the Policy.

III. Conclusion

We affirm the trial court’s grant of Erie’s cross-motion for summary 

judgment. Based on our full review of the Policy, “direct physical loss” requires a 

tangible change or alteration to the properties—which does not include a loss of use. 

Appellants have not alleged a tangible change or alteration to their properties, and 

thus, they have not shown “physical loss of or damage to Covered Property” as 

required by the Policy. 

So ordered.