United States Court of Appeals

For the First Circuit

No. 23-1286

LAWRENCE GENERAL HOSPITAL,

Plaintiff, Appellant,

v.

CONTINENTAL CASUALTY COMPANY,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before

Gelpí, Howard, and Rikelman,

Circuit Judges.

Roman Martinez, with whom Robert J. Gilbert, Michael Huggins, 

David A. Barrett, Margaret A. Upshaw, and Latham & Watkins LLP

were on brief, for appellant.

Kannon K. Shanmugam, with whom H. Christopher Boehning, 

Matthew M. Higgins, Brian M. Lipshutz, Kenneth N. Thayer, Paul, 

Weiss, Rifkind, Wharton & Garrison LLP, and Conn Kavanaugh 

Rosenthal Peisch & Ford, LLP were on brief, for appellee.

January 10, 2024
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RIKELMAN, Circuit Judge. Lawrence General Hospital 

("LGH") sued its insurer, Continental Casualty Company, for 

denying coverage for losses LGH alleges it suffered during the 

COVID-19 pandemic. Relying on recent decisions rejecting similar 

claims, the district court granted Continental's motion to dismiss 

LGH's complaint under Federal Rule of Civil Procedure 12(b)(6). 

On appeal, LGH contends that the district court misconstrued the 

critical case law and that the detailed allegations in its 

complaint are sufficient to state a claim for two different types 

of coverage under its policy. First, LGH argues that the policy 

provisions covering "direct physical loss of or damage to 

property," associated business-interruption losses, and related 

expenses should apply because the SARS-CoV-2 virus chemically 

bonded with its property, resulting in physical damage. Second, 

LGH contends its separately purchased Health Care Endorsement 

covers losses and costs incurred as a result of complying with 

government decontamination orders related to COVID-19. Applying 

Massachusetts state law, we find that LGH failed to state a claim 

that the SARS-CoV-2 virus caused "direct physical loss of or damage 

to [its] property." However, because we conclude that LGH was 

subject to decontamination orders and thus states a claim for 

coverage under the Health Care Endorsement, we affirm in part,

reverse in part, and remand for further proceedings.
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I. BACKGROUND

A. Relevant Facts

We "draw the facts from the complaint and its 

attachments," taking the well-pleaded facts as true and construing 

all reasonable inferences in LGH's favor. Lanza v. Fin. Indus. 

Regul. Auth., 953 F.3d 159, 161 (1st Cir. 2020); Barchock v. CVS 

Health Corp., 886 F.3d 43, 48 (1st Cir. 2018). 

1. LGH's Insurance Policy

LGH is a nonprofit community hospital operating in 

northeastern Massachusetts and southern New Hampshire. It has its 

main campus at the eponymous Lawrence General Hospital in Lawrence, 

Massachusetts but also operates various other ambulatory surgery 

centers, family health centers, outpatient rehabilitation centers, 

and laboratories in the region. LGH purchased an "all risk" 

commercial property insurance policy ("the policy") from 

Continental for the period of October 1, 2019, through October 1, 

2020. The policy includes two types of coverage at issue in this 

appeal.

First, the policy provides broad coverage for "direct 

physical loss of or damage to property." This coverage includes 

the value of the lost or damaged property itself, as well as 

related losses. The "Business Interruption" provision insures 

against "loss resulting from [the] necessary interruption of [the] 

business caused by direct physical loss of or damage to covered 
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property" during the time necessary to "rebuild, repair or replace" 

the property. The "Extra Expense" provision covers "the reasonable 

and necessary extra expense . . . incurred by the Insured in order 

to continue as nearly as practicable the normal operation of the 

Insured's business following direct physical loss of or damage to 

covered property by perils(s) [sic] insured against." The policy 

provides primary coverage of up to $563 million for "direct 

physical loss of or damage to covered property." 

Second, LGH purchased an additional Health Care 

Endorsement, which includes "Disease Contamination Coverage." 

This coverage is triggered by an "evacuation or decontamination 

order at a [covered] location by the National Center [sic] for 

Disease Control, authorized public health official or governmental 

authority because of the discovery or suspicion of a communicable 

disease or the threat of the spread of a communicable disease." 

(Emphasis omitted.) Continental will pay for "direct physical 

loss of or damage to covered property," a variety of "necessary 

and reasonable costs," and lost business income "due to the 

evacuation and decontamination order." Under the Health Care 

Endorsement, the policy provides coverage of up to $1 million per 

occurrence. LGH alleges that it was subject to many occurrences

triggering coverage under the endorsement. 
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2. The COVID-19 Pandemic and LGH's Response

During early 2020, in the middle of the policy period, 

the SARS-CoV-2 virus spread throughout the United States, leading

quickly to tens of thousands of cases of COVID-19.1 The city of 

Lawrence experienced some of the highest rates of COVID-19 

infection in the Commonwealth, and LGH served as the main COVID19 treatment facility in the region. 

In its complaint, LGH alleges that it suffered physical 

loss of and damage to its property due to the "continuous 

reintroduction" of SARS-CoV-2 particles. Relying on expert 

testimony, LGH alleges that through a process called "adsorption" 

SARS-CoV-2 particles create "an actual [noncovalent] chemical 

bond" with the surface of the objects they land on, causing 

structural changes to the objects themselves and making the virus 

"hard to detach." LGH distinguishes between SARS-CoV-2 particles 

that are merely "deposited" on an object, "akin to spilled flour," 

and adsorbed particles which "adhere[] to the surface of the 

adsorbing object and concentrate[] there." 

However, LGH also alleges that the nature of the bond 

between SARS-CoV-2 particles and physical objects "varies, often 

markedly so, depending on the type of object." For example, LGH 

1 Like the parties, we distinguish between the disease, COVID19, and the virus that causes it, SARS-CoV-2.
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contends that "the properties of the host surface can affect 

whether an adhered (deposited, adsorbed, or somewhere in between) 

viral particle remains stuck to the surface and, if so, whether it 

retains its infectivity." As for the bond's duration, LGH alleges 

that some studies have found the SARS-CoV-2 virus remains 

infectious for seven days on surfaces such as plastic, stainless 

steel, glass, and wood; other studies have found SARS-CoV-2 may 

remain infectious on glass and stainless steel for approximately

a month under indoor conditions. 

As a result of this contamination, LGH alleges that it 

was forced to undertake a series of remediation efforts including: 

"enhanced cleaning" using "stronger (and more expensive and timeconsuming) cleaning products and techniques"; extensive testing, 

cleaning, and maintenance of HVAC systems, including replacement 

of HEPA filters; and sterilization or disposal of items such as 

"intravenous therapy (IV) poles, medical gas, linens, toilet 

paper, and food." 

3. Alleged Decontamination Orders

Additionally, LGH alleges that it was subject to several 

government decontamination orders sufficient to trigger the 

Disease Contamination Coverage provision. On March 11, 2020, the 

World Health Organization declared the global COVID-19 outbreak a 

pandemic. Both the federal government and Massachusetts quickly 
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reacted to the news by each declaring a COVID-19 state of 

emergency. 

LGH points to directives from the Massachusetts 

Department of Public Health (DPH) and Centers for Disease Control 

(CDC) as representative examples of COVID-19 decontamination 

orders. On March 15, 2020, DPH issued a memorandum requiring 

hospitals to postpone or cancel all nonessential, elective 

invasive procedures until the state of emergency was lifted. 

"[N]onessential, elective invasive procedures" were defined 

broadly as "procedures that are scheduled in advance because the 

procedure does not involve a medical emergency." On May 18, 2020, 

DPH issued an updated memorandum authorizing hospitals to resume 

a subset of invasive, elective procedures, including cancer 

screenings and organ transplants, if the hospitals both met and 

attested to compliance with specific safety standards outlined in 

the DPH "Reopen Approach for Acute Care Hospitals guidance." The 

Reopen Approach required, for example, that hospitals "have an 

established plan for thorough cleaning and disinfection of all 

common and procedural areas, including in-between patient 

encounters in treatment rooms, which may require hiring 

environmental services staff and reducing patient hours to allow 

for more frequent cleaning." If a hospital failed to meet the 

stated safety standards, the Reopen Approach warned that the 

hospital must "promptly suspend provision of non-emergent Phase 1 
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services," including "nonessential, elective invasive" surgical 

procedures. DPH also warned it would "monitor and assess 

compliance," requiring "remedial action or suspension of [Phase 1] 

procedures and services as warranted." 

On June 8, 2020, DPH issued a new memorandum authorizing 

hospitals to resume "elective, non-urgent procedures and 

services," again subject to certain mandatory conditions. These 

conditions included compliance with the previously stated safety 

standards, as well as "[o]ngoing compliance with CDC requirements 

and other public health guidance regarding environmental infection 

controls," including "thorough cleaning and disinfection of 

[patient] room[s] and equipment." LGH alleges that, by reference, 

the June 8 order made mandatory a variety of CDC directives. As 

an example, LGH cites the CDC's September 2020 publication 

"Guidance for Cleaning and Disinfecting Public Spaces, Workplaces, 

Businesses, Schools, and Homes," which included suggestions on 

using Environmental Protection Agency-approved cleaning products, 

regularly disinfecting high-touch areas, and ensuring the use of

appropriate personal protective equipment when using disinfectants 

and chemicals.2 

2 LGH also cites as mandatory the CDC's June 2021 guidance on 

ventilation system upgrades. However, this document was issued 

well after the October 2019-October 2020 policy period, and it is 

not clear -- nor does LGH explain -- why this guidance would be a 
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B. Procedural History

On April 8, 2020, LGH filed a claim with Continental for 

coverage of COVID-19 losses beginning on March 16, 2020. After 

Continental denied coverage, LGH sued in Massachusetts Superior 

Court, bringing solely Massachusetts state-law claims. 

Continental then removed the case on the basis of diversity 

jurisdiction under 28 U.S.C. § 1332 to the District of 

Massachusetts.

Now in federal court, LGH filed an amended complaint to

attempt to satisfy the legal requirements specified in three 

recently decided cases: Verveine Corp. v. Strathmore Insurance

Co., 184 N.E.3d 1266 (Mass. 2022); SAS International, Ltd. v. 

General Star Indemnity Co., 36 F.4th 23 (1st Cir. 2022); and Legal 

Sea Foods, LLC v. Strathmore Insurance Co., 36 F.4th 29 (1st Cir. 

2022). Continental moved to dismiss the amended complaint for 

failure to state a claim, and on February 24, 2023, the district 

court granted the motion to dismiss. LGH timely appealed.

II. STANDARD OF REVIEW

We review de novo a district court's decision to grant 

a motion to dismiss under Rule 12(b)(6), reversing the dismissal 

only if "the combined allegations, taken as true . . . state a 

binding decontamination order under the policy. As such, we do 

not consider it in our analysis. 
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plausible, not a merely conceivable, case for relief." Lee v. 

Conagra Brands, Inc., 958 F.3d 70, 74 (1st Cir. 2020) (quoting 

Sepúlveda-Villarini v. Dep't of Educ. of P.R., 628 F.3d 25, 29 

(1st Cir. 2010)). To determine if the plaintiff's allegations are 

plausible, we "separate factual allegations from conclusory ones."

Conformis, Inc. v. Aetna, Inc., 58 F.4th 517, 528 (1st Cir. 2023) 

(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009)). We then 

"accept as true all well-pleaded facts alleged in the complaint 

and draw all reasonable inferences therefrom in the pleader's 

favor." Lanza, 953 F.3d at 162 (quoting Nystedt v. Nigro, 700 

F.3d 25, 30 (1st Cir. 2012)). 

III. DISCUSSION

A. Interpreting Insurance Contracts

As this case is in federal court by virtue of diversity 

jurisdiction, state law provides the substantive rules of our

decision. See Torres-Ronda v. Nationwide Mut. Ins. Co., 18 F.4th 

80, 84 (1st Cir. 2021); Erie R. Co. v. Tompkins, 304 U.S. 64, 78 

(1938). The parties agree that Massachusetts law governs the 

policy, so we endeavor to predict how the Commonwealth's highest 

court would decide this case, regardless of whether our independent 

analysis would suggest a different outcome. See Aubee v. Selene 

Fin. LP, 56 F.4th 1, 4 (1st Cir. 2022).

Massachusetts courts construe the language of an 

insurance policy as a matter of law, applying many of the usual 
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rules for interpreting contracts. Verveine, 184 N.E.3d at 1272;

Valley Forge Ins. Co. v. Field, 670 F.3d 93, 97 (1st Cir. 2012)

(applying Massachusetts law). That, of course, means beginning 

with the "actual language of the polic[y]." Brazas Sporting Arms, 

Inc. v. Am. Empire Surplus Lines Ins. Co., 220 F.3d 1, 4 (1st Cir. 

2000) (applying Massachusetts law). 

Under Massachusetts law, we interpret "the words of the 

policy in their usual and ordinary sense." Verveine, 184 N.E.3d 

at 1272 (quoting Citation Ins. Co. v. Gomez, 688 N.E.2d 951, 952-

53 (Mass. 1998)). This analysis requires that we determine "the 

fair meaning of the language used, as applied to the subject 

matter." Id. (quoting Gordon v. Safety Ins. Co., 632 N.E.2d 1187, 

1189 (Mass. 1994)). And that means interpreting the policy "in a 

reasonable and practical way, consistent with its language, 

background, and purpose." See Gen. Hosp. Corp. v. Esoterix Genetic

Lab'ys, LLC, 16 F.4th 304, 308 (1st Cir. 2021) (citation omitted) 

(applying Massachusetts law). We also consider "what an 

objectively reasonable insured, reading the relevant policy 

language, would expect to be covered." Verveine, 184 N.E.3d at 

1272 (quoting Dorchester Mut. Ins. Co. v. Krusell, 150 N.E.3d 731, 

738 (Mass. 2020)); Brazas Sporting Arms, 220 F.3d at 4 (citation

omitted). 

A term or phrase in an insurance policy is ambiguous 

only if "it is susceptible of more than one meaning and reasonably 
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intelligent persons [could disagree on] which meaning is the proper 

one." Verveine, 184 N.E.3d at 1272 (quoting Dorchester Mut. Ins., 

150 N.E.3d at 738). A court will not find ambiguity merely because 

"the parties offer different interpretations of the policy 

language," Scottsdale Ins. Co. v. Torres, 561 F.3d 74, 77 (1st 

Cir. 2009), or there are "multiple dictionary definitions of a 

word." Citation Ins. Co., 688 N.E.2d at 953. If a term or phrase 

in an insurance policy is reasonably susceptible of more than one 

meaning, it is "strictly construed against the insurer" and in 

favor of the insured. Easthampton Congregational Church v. Church 

Mut. Ins. Co., 916 F.3d 86, 92 (1st Cir. 2019) (citing Metro. Prop. 

& Cas. Ins. Co. v. Morrison, 951 N.E.2d 662, 671 (Mass. 2011)). 

With these principles in mind, we turn to LGH's policy. 

B. "Direct Physical Loss of or Damage to Property"

LGH contends it adequately alleged that SARS-CoV-2

chemically bonded with its property, resulting in physical 

alteration that qualifies as direct physical loss or damage under 

the policy, and the district court therefore erred in dismissing 

this claim. We evaluate LGH's argument under a trio of insurance 

cases decided under Massachusetts law interpreting "direct 

physical loss of or damage to property" in the context of the 

COVID-19 pandemic. See Verveine, 184 N.E.3d 1266; SAS, 36 F.4th 

23; Legal Sea Foods, 36 F.4th 29. Based on this precedent, we 

conclude that we must affirm the district court. 
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We begin with a discussion of these three critical cases. 

In Verveine, Boston-area restaurants challenged the denial of 

their commercial insurance claims for lost revenue from the COVID19 pandemic and resulting government restrictions. 184 N.E.3d at 

1270-71. The policies at issue covered "direct physical loss of 

or damage to" the insured premises as well as lost business income 

and extra expenses sustained due to suspension of operations 

"caused by direct physical loss of or damage to property at [the 

insured premises]." Id. at 1273 (emphasis omitted). The 

Massachusetts Supreme Judicial Court ("SJC") upheld the dismissal 

of the restaurants' complaint under its state equivalent to Federal 

Rule 12(b)(6). Id. at 1270. 

Most importantly, Verveine held that property does not 

sustain physical loss or damage "in the first place unless there 

needs to be active repair or remediation measures to correct the 

claimed damage or the business must move to a new location." Id.

at 1275 (emphasis added) (citing Sandy Point Dental, P.C. v. 

Cincinnati Ins. Co., 20 F.4th 327, 333 (7th Cir. 2021)). That is 

because "'direct physical loss of or damage to' property requires 

some 'distinct, demonstrable, physical alteration of the 

property,'" id. (quoting 10A Jordan R. Plitt et al., Couch on 

Insurance § 148:46 (3d ed. 2016)), and of course property cannot 

repair itself. The SJC explained that "saturation, ingraining, or 

infiltration of a substance into the materials of a building or 
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persistent pollution of a premises requiring active remediation 

efforts is sufficient to constitute 'direct physical loss of or 

damage to property.'" Id. at 1276. By contrast, the "[e]vanescent 

presence of a harmful airborne substance that will quickly 

dissipate on its own, or surface-level contamination that can be 

removed by simple cleaning, does not physically alter or affect 

property." Id. Applying this standard, the SJC held that the 

restaurants' losses from COVID-19 related closures were "not in 

any way attributable to a direct physical effect on the plaintiffs' 

property that can be described as loss or damage." Id. To the 

contrary, the court stated, the restaurants' "continuing ability 

to provide takeout and other services" demonstrated that there 

were no physical effects on the restaurants' property itself, and 

consequently the alleged "presence" of the virus would either 

"dissipate on its own" or be removed "by simple cleaning." Id.

Shortly after Verveine was decided, our court applied 

its reasoning in two opinions issued on the same day. Both cases 

involved an appeal from a Rule 12(b)(6) dismissal for claims 

virtually identical to those in Verveine: alleged wrongful denial 

of commercial property insurance coverage for losses related to 

the COVID-19 pandemic. SAS, 36 F.4th at 24-25; Legal Sea Foods, 

36 F.4th at 30-31. However, both complaints involved slightly 

more detailed allegations than those in Verveine. SAS alleged 

that "smaller aerosol droplets carrying SARS-CoV-2 can linger in 
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the air for hours and can be pulled into air circulation systems 

and spread to other areas in a building"; "SARS-CoV-2 can linger 

on surfaces for up to 28 days, serving as a vehicle for viral 

transmission during that timespan"; and that the virus "cannot 

simply be removed with disinfectant because it is continually 

spread and reintroduced." SAS, 36 F.4th at 27-28 (internal 

quotation marks omitted). Legal Sea Foods alleged that the virus 

"attach[ed] to surfaces on and within . . . insured property and 

[hung] in the air," resulting in "losses attributable to 

governmental closure orders and losses due to the actual presence

of the SARS-CoV-2 virus at Legal's restaurants," requiring 

"increase[d] frequency of cleaning" at those restaurants. Legal 

Sea Foods, 36 F.4th at 32, 35-36 (alterations in original). 

Nonetheless, relying on Verveine, we found that the 

allegations in both complaints amounted to no more than an 

"[e]vanescent presence of a harmful airborne substance that will 

quickly dissipate on its own, or surface-level contamination that 

c[ould] be removed by simple cleaning." SAS, 36 F.4th at 27-28

(first alteration in original) (citing 184 N.E.3d at 1276); Legal 

Sea Foods, 36 F.4th at 34-36 (same). Regarding the spread of SARSCoV-2 through the air, we explained that "we do not see a reason 

for concluding that the SJC would view Legal's allegations 

concerning the virus's circulation and hours-long persistence in 

the air as establishing more than '[e]vanescent presence.'" Legal 
- 16 -

Sea Foods, 36 F.4th at 36. As to the allegations about SARS-CoV-2

contamination lasting "for up to 28 days," we found "no allegation 

that the virus cannot 'be removed by simple cleaning.'" SAS, 36 

F.4th at 27-28. In evaluating the alleged remediation efforts, we 

explained that the SJC's invocation of the phrase "simple cleaning"

referred to "the intensity of remediation measures that would be 

required to remove a droplet." Legal Sea Foods, 36 F.4th at 36. 

Given that Legal Sea Foods alleged only "increase[d] frequency of 

cleaning," we saw "nothing . . . in Legal's complaint that would 

provide a basis for concluding that Verveine can be distinguished 

from the case before us on such a basis." Id.

Turning to the arguments here, LGH contends that its 

property damage claim is sufficient to survive a Rule 12(b)(6) 

motion because the allegations in its complaint are materially 

different from those in Verveine, SAS, and Legal Sea Foods. In 

particular, LGH alleges that SARS-CoV-2 physically altered the 

structure of its property through a process called "adsorption,"

which it argues is sufficient to establish direct physical loss or 

damage under Verveine. LGH further contends that the physically 

altered property was then unsafe because "[h]umans can become 

infected by touching . . . an object to which viral particles have 

attached." It notes that, in Verveine, the SJC favorably cited 

cases where ammonia, gasoline, and noxious odors constituted 

physical loss or damage. See 184 N.E.3d at 1276. According to 
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LGH, in those cases, just like here, the property was unsafe 

because of the potential harm to people from being inside it, even 

though there was no structural issue with the property itself. 

As a result of this newly dangerous property, LGH argues,

it undertook substantial remediation efforts that went beyond 

"simple cleaning." Given these efforts and LGH's allegation that 

the virus may remain on surfaces for up to a month, it contends

the district court erred by dismissing its claim. In support, LGH 

cites our opinions in SAS and Legal Sea Foods, where we suggested 

that the presence of a virus on a surface for twenty-eight days 

may be too long to be deemed "evanescent" and then focused on the 

lack of allegations in those cases of any remediation efforts 

beyond "simple cleaning." SAS, 36 F.4th at 28 ("But, even if the 

presence of the virus on a surface for 28 days is too long to be 

deemed 'evanescent,' SAS makes no allegation that the virus cannot 

'be removed by simple cleaning.'" (citation omitted)); Legal Sea 

Foods, 36 F.4th at 36 ("Even if a period of 28 days is too long to 

be 'evanescent,' Legal has not alleged the virus cannot 'be removed 

by simple cleaning,' as it alleges only that it has had to 

'increase frequency of cleaning' in its restaurants.").

Even accepting all LGH's allegations as true, we 

conclude that we must reject its arguments for three reasons. 

First, the central holding of Verveine, as applied to this case,

is that property cannot repair itself and thus "direct physical 
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loss of or damage to property" exists only if a party must take 

active efforts to repair it. 184 N.E.3d at 1275. We read this to 

mean that even "distinct, demonstrable, physical alteration" of 

property that will resolve of its own accord, without the aid of 

remediation efforts, is not "direct physical loss of or damage to 

property" under Massachusetts law. Id. Moreover, we read the 

SJC's discussion of "evanescent presence" as an illustration of 

its central holding: "direct physical loss of or damage to 

property" occurs only when "active remediation measures" to 

correct the claimed damage are necessary. Id. at 1276. Both 

"evanescent presence" and its inverse, "saturation, ingraining, or 

infiltration of a substance" into property, serve as 

demonstrations of this holding, not as a separate test of "direct 

physical loss or damage." Id. Nothing in our opinions in SAS and 

Legal Sea Foods suggests otherwise.

Taking as true LGH's allegation that SARS-CoV-2

particles can physically alter the affected property through 

adsorption, LGH's complaint still makes clear that, absent any 

intervention by it whatsoever, SARS-CoV-2 particles dissipate or 

become noninfectious within as little as seven to twenty-eight 

days. Any "damage" that can fix itself without further 

intervention, and certainly within a period as short as twentyeight days or less, cannot amount to "direct physical loss of or 

damage to property" under Massachusetts law as explained in 
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Verveine. Therefore, even if LGH did undertake remediation efforts 

that amounted to more than "simple cleaning," those efforts were 

not to address any "direct physical loss of or damage to property."

Second, this case is distinguishable from the cases 

discussed by the SJC about ammonia release, persistent odor, or 

gasoline contamination where "direct physical loss of or damage to 

property" was found. See Verveine, 184 N.E.3d at 1276 (first 

citing Gregory Packaging, Inc. v. Travelers Prop. Cas. Co. of Am., 

No. 2:12–cv–04418, 2014 WL 6675934, at *1 (D.N.J. Nov. 25, 2014) 

(ammonia release requiring outside remediation company to reduce 

levels in building low enough for safe occupancy inflicted direct 

physical loss or damage); then citing W. Fire Ins. Co. v. First 

Presbyterian Church, 437 P.2d 52, 53-55 (Colo. 1968) (gasolineinfiltrated soil and vapors contaminated foundation, halls, and 

rooms); and then citing Farmers Ins. Co. of Ore. v. Trutanich, 858 

P.2d 1332, 1335-36 (Or. Ct. App. 1993) (persistent odor in 

residence from methamphetamine production constituted physical 

damage, and therefore cost of remediation was recoverable)). Here,

the allegations demonstrate that LGH undertook its remediation 

efforts not to address physical damage to the property, but to 

prevent the spread of COVID-19 among people present in the 

hospital. 

Although LGH argues that these cases represent examples 

where the property was unsafe as a result of its potential harm to 
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humans, even though it remained structurally sound, a close review

shows why the SJC concluded these cases did not help the plaintiffs 

in Verveine and why they also do not help LGH. In Gregory 

Packaging, the local fire department instituted a mile-radius 

evacuation zone around the affected property and did not allow the 

insureds to reenter the building until it was satisfied that the 

remediation company reduced the ammonia gas to "a safe level for 

occupancy." 2014 WL 6675934 at *1, *2-4. Similarly, in Western 

Fire Insurance Co., the insureds evacuated at the behest of the 

local fire department, which determined that "the infiltration of 

gasoline in the soil under and around the building" rendered the 

building "uninhabitable" and use of the building "dangerous." 437 

P.2d at 54. There are no similar facts alleged here.3 Instead, 

many of LGH's covered properties remained open for some uses, a 

fact that, per the SJC, indicates "there were not physical effects 

on the property itself." Verveine, 184 N.E.3d at 1276.

Additionally, these cases are characterized by the 

uninhabitability of the premises due to pollution or persistent 

3 LGH alleges that two of its medical facilities were closed 

by government order from early March 2020 until May 11, 2020, and 

August 18, 2020, respectively. These closures were not a result 

of SARS-CoV-2 rendering the buildings uninhabitable, however, but 

instead the result of Massachusetts' policy on elective 

procedures. See Verveine, 184 N.E.3d at 1276 ("COVID-19 orders 

standing alone cannot possibly constitute 'direct physical loss of 

or damage to' property.").
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odor emanating from the building itself, including its walls and 

foundation, not due to an infectious disease carried by people

within the building. Given that "[commercial insurance] policies 

insure property, not people," it is understandable that an "all 

risk" policy would cover pollution arising from the covered 

property itself, not the people within it. See Schleicher & 

Stebbins Hotels, LLC v. Starr Surplus Lines Ins. Co., 302 A.3d 67, 

77 (N.H. 2023).

Third, as the SJC did at the time it decided Verveine, 

we consider the clear consensus of courts throughout the country, 

which cuts against LGH and demonstrates the flaws in its argument. 

See Or. Clinic, PC v. Fireman's Fund Ins. Co., 75 F.4th 1064, 1071 

n.1 (9th Cir. 2023) (noting that "as of May 25, 2023, 819 suits 

raising similar claims . . . have been dismissed with prejudice by 

federal and state courts"). For example, the New Hampshire Supreme 

Court recently held that the dissipation of SARS-CoV-2 within a 

month is essential to the determination that it does not cause

direct physical loss or damage. See Schleicher & Stebbins Hotels, 

302 A.3d at 78. As the court aptly stated:

Accepting for the purposes of this appeal 

that . . . the virus can linger on surfaces 

for as long as 28 days, the fact that the virus 

will eventually dissipate on its own is 

significant to the question of whether the 

property has been changed in a distinct and 

demonstrable way. Property that has been 

changed in a distinct and demonstrable way 
- 22 -

will not be changed back simply by the passage 

of time. 

Id. Similarly, as the Nevada Supreme Court explained, "[p]resence 

of a physical virus on the property, even if it 'attaches to' the 

property, does not give rise to the necessary transformative 

element of something like 'fire, water, or smoke.' Otherwise, the 

alleged presence of a physical force would 'render[] every sneeze, 

cough, or even exhale' a qualifying harm." Starr Surplus Lines 

Ins. Co. v. Eighth Jud. Dist. Ct. in & for Cnty. of Clark, 535 

P.3d 254, 264 (Nev. 2023) (citations omitted). 

The logic in these opinions echoes the SJC's explanation 

in Verveine that "the question is not whether the virus is 

physical, but rather if it has direct physical effect on property

that can be fairly characterized as 'loss or damage.'" 184 N.E.3d 

at 1275. And as multiple courts have found, such direct physical 

effect on property does not occur with SARS-CoV-2, where "the 

problem of COVID-19 and its associated health risks are entirely 

dependent on people being present at the property, rather than 

arising from any harm to or defect in the property itself." Eighth 

Jud. Dist. Ct., 535 P.3d at 266. Thus, we conclude that the SJC 

would find no coverage under the physical property damage provision 

here, despite the detailed allegations in LGH's amended complaint.

We address one final point on this issue. We disagree 

with LGH that ruling that a virus or disease cannot cause physical 
- 23 -

loss or damage under the policy is irreconcilable with the policy's 

Disease Contamination Coverage provision. This provision states:

If as a result of an evacuation or 

decontamination order at a location by the 

National Center [sic] for Disease Control, 

authorized public health official or 

governmental authority because of the 

discovery or suspicion of a communicable 

disease or the threat of the spread of a 

communicable disease, the Insurer will pay 

for: (1) direct physical loss of or damage to 

covered property . . . . 

(First emphasis added.) The plain text of the policy clearly 

contemplates coverage for a direct physical loss of or damage to 

property "as a result of an evacuation or decontamination order," 

not from the communicable disease itself. 

In sum, we conclude that the district court did not err 

in finding LGH failed to allege "direct physical loss of or damage 

to" its covered property. The allegations, taken as true, 

demonstrate only a risk to people from the virus, not tangible 

damage to LGH's physical property requiring remediation. Our 

conclusion here reflects not only our understanding of 

Massachusetts law, but also the clear consensus of courts across 

the country. 

C. Disease Contamination Coverage Provision

LGH next argues that the district court erred in 

dismissing its claim under the Disease Contamination Coverage 

provision. On this issue, we agree with LGH. 
- 24 -

This provision covers losses or costs incurred when four 

criteria are met: (1) LGH is subject to "an evacuation or 

decontamination order"; (2) "at a [covered] location"; (3) issued 

"by the National Center [sic] for Disease Control, authorized

public health official or governmental authority"; (4) "because 

of . . . the threat of the spread of a communicable disease." 

(Emphasis omitted.) LGH alleges that it was subject to several 

mandatory orders from the Massachusetts DPH and, by reference, the 

CDC, which are sufficient to trigger coverage under this provision. 

Importantly, on appeal, Continental has not contested 

that LGH has met the last three criteria for coverage under this 

provision. Instead, Continental focuses on the first factor --

whether LGH was subject to a "decontamination order" -- and argues 

that it was not. In Continental's view, the DPH and CDC directives 

cited by LGH were not mandatory orders at all. Further, 

Continental contends the directives did not require 

"decontamination." 

The terms "decontamination order," "decontamination," 

and "order" are not defined in the policy, and accordingly we 

construe their "fair meaning . . . as applied to the subject 
- 25 -

matter." Gordon, 632 N.E.2d at 1189 (citation omitted). Under 

this framework, we reject both of Continental's arguments.4

1. The Directives Were Orders

The "fair meaning" of the term "order" is unambiguous, 

and as such we consider whether the directives identified by LGH 

are "orders" within that term's "usual and ordinary sense." 

Citation Ins. Co., 688 N.E.2d at 952-53 (citation omitted). As 

other courts interpreting this term have found, and we agree, an 

"order" must be compulsory. See Conn. Child.'s Med. Ctr. v. Cont'l 

Cas. Co., No. 22-322, 2023 WL 2961738, at *2 (2d Cir. Apr. 17, 

2023) (discussing the lack of "orders that required PlaintiffsAppellants to evacuate or decontaminate their properties" 

(emphasis added)); PS Bus. Mgmt., L.L.C. v. Fireman's Fund Ins. 

Co., No. 21-30723, 2022 WL 2462065, at *4 (5th Cir. July 6, 2022)

(discussing whether "any public health order mandated that 

[Plaintiffs'] premises 'be evacuated, decontaminated, or 

disinfected'" (emphasis added)). The parties do not dispute this 

definition. Rather, they dispute whether the sanctions LGH would 

face for its noncompliance with the DPH and CDC directives are 

4 In a footnote in its brief, Continental also suggests that 

LGH's claims under the Disease Contamination Coverage provision 

would be foreclosed by several exclusions. We leave for the 

district court to decide any issues related to the alleged 

exclusions given that Continental did not include an argument on 

this defense in its briefing below or on appeal. 
- 26 -

severe enough for those directives to be considered "orders." We 

hold that they are. 

LGH alleges that beginning on March 15, 2020, DPH 

directed all Massachusetts hospitals to "postpone or cancel any 

nonessential, elective invasive procedures," which were defined as 

"procedures that are scheduled in advance because the procedure 

does not involve a medical emergency." It further alleges that 

beginning on May 18, 2020, it was subject to an updated memorandum 

requiring it to comply with specific public health and safety 

standards before the hospital was allowed to move forward with 

"elective procedures" such as "cancer screenings in high-risk 

groups," "prenatal care," "removal of breast malignanc[ies]," and 

"organ transplants." The mandatory public health standards 

included "cleaning and disinfection of all common and procedural 

areas." LGH claims an additional June 2020 memorandum required 

its "[o]ngoing compliance" with the prior "public health and safety 

guidelines," as well as with "CDC requirements and other public 

health guidance regarding environmental infection controls" before 

engaging in "non-essential elective invasive procedures and 

services." As LGH points out, both the May and June 2020 

directives required that it attest to its compliance with the 

stated conditions and informed LGH that noncompliance would result 

in "remedial action or suspension of [non-essential elective 

invasive] procedures and services." According to Continental, 
- 27 -

however, the directives were not orders because LGH could have 

"chosen" to remain open for only non-elective procedures or waited 

for DPH to change the requirements for hospitals to resume elective 

procedures.

We cannot square Continental's argument with our 

obligation to interpret the policy "in a reasonable and practical 

way, consistent with its language, background, and purpose." Gen. 

Hosp. Corp., 16 F.4th at 308 (citation omitted). LGH's compliance 

with the directives was not optional under any practical 

understanding of that term. Conducting the type of urgent elective 

procedures identified in the directives is important both to LGH's 

mission of providing necessary care to its community and to its 

bottom line and ability to operate. As LGH convincingly argues, 

the "choice" to comply with the stated conditions or forgo the 

ability to treat "the vast majority of its patients" for an 

indefinite period is no choice at all.

Further, Continental's interpretation would be 

inconsistent with the purpose of the policy: insurance coverage so 

that LGH could continue to provide medical care to patients. 

Following Continental's argument to its logical conclusion, no 

evacuation or decontamination directive would ever be mandatory, 

because a facility would always have the option of ceasing to 

provide all or a subset of medical services instead of complying. 
- 28 -

The additional coverage LGH purchased with the Health Care 

Endorsement would therefore be illusory. 

Finally, Continental cites two cases affirming district 

court rulings that government decontamination orders were 

insufficient to support coverage under similar insurance 

provisions interpreted under Connecticut and Louisiana law. See

Conn. Child.'s Med. Ctr., 2023 WL 2961738, at *2 (applying 

Connecticut law and upholding the grant of a motion to dismiss 

where the plaintiff-hospital "failed to allege that any specific

government order required them to evacuate or decontaminate their 

properties" (emphasis added)); PS Bus. Mgmt., L.L.C., 2022 WL 

2462065, at *4 (applying Louisiana law and upholding the grant of 

a motion to dismiss where the plaintiff failed to allege "that any 

public health order mandated that their premises 'be evacuated, 

decontaminated, or disinfected'"). However, in each of these cases

the plaintiffs failed to describe the specific evacuation or

decontamination orders their property was subject to, instead 

referring generally to executive orders and public health 

guidance. See Complaint at ¶¶ 45-57, Conn. Child.'s Med. Ctr. v. 

Cont'l Cas. Co., 581 F. Supp. 3d 385 (D. Conn. 2022) (No. 3:21-

cv-291) (failing to identify the specific orders requiring 

decontamination and alleging plaintiff was subject to social 

gathering restrictions, "directives and guidance" from the 

Connecticut Department of Public Health, and "guidance" from OSHA 
- 29 -

and the CDC); Notice of Removal, Exhibit B at 3 ¶ 9, PS Bus. Mgmt.

v. Fireman's Fund Ins. Co., 2021 WL 4989870 (E.D. La. Oct. 7, 2021)

(No. 2:21-cv-1229) (alleging only that plaintiff was subject to 

"non-essential business[]" closures). These examples are clearly 

distinguishable from the specific and detailed allegations in 

LGH's amended complaint.

2. The Orders Required Decontamination

The parties also dispute whether the DPH and CDC 

directives were "decontamination" orders. Importantly, both LGH 

and Continental agree that decontamination involves "remov[ing]," 

"eliminat[ing]," or "rid[ding] [a property] of" contamination.

But Continental argues that an insured can never remove, eliminate,

or rid itself of COVID-19 "because it is repeatedly reintroduced 

by people." Extending the logic of Continental's argument, the 

Disease Contamination Coverage would not apply to COVID-19 at all 

and could only be invoked when an insured's efforts lead to nearpermanent decontamination. 

At this motion to dismiss stage, viewing LGH's well-pled 

allegations in the light most favorable to it, we disagree with 

Continental. We begin, of course, with "the actual language of 

the polic[y]." Brazas Sporting Arms, Inc., 220 F.3d at 4; see 

also Gen. Hosp. Corp., 16 F.4th at 308. The Disease Contamination 

Coverage provision specifically applies to public health orders 

issued "because of the discovery or suspicion of a communicable 
- 30 -

disease or the threat of the spread of a communicable disease." 

There is no dispute that COVID-19 is a communicable disease. 

Further, Continental has not pointed us to any language in the 

policy suggesting that decontamination needs to be near-permanent 

to qualify for coverage. Continental's own example of 

decontamination, the removal of bacteria that causes Legionnaires' 

disease from ventilation equipment, does not on its face foreclose 

the possibility that the bacteria could be reintroduced to the 

newly cleaned equipment.

Additionally, Continental's argument that the term 

"decontamination" means near-permanent decontamination appears at 

odds with the purpose of the policy. By Continental's reasoning, 

a hospital that could become re-contaminated within the policy 

period with a particular bacteria or virus would never be able to 

claim coverage under the Disease Contamination Coverage provision. 

Yet the very nature of a "communicable disease" implies the 

possibility of re-contamination. Thus, the risk that a hospital's 

premises could be contaminated multiple times with a particular 

bacteria or virus during the outbreak of a communicable disease 

appears to be the type of healthcare-specific risk that the policy 

was designed to cover. See Brazas Sporting Arms, Inc., 220 F.3d 

at 4 (requiring, under Massachusetts law, that we "consider 'what 

an objectively reasonable insured, reading the relevant policy 

language, would expect to be covered.'" (citation omitted)). 
- 31 -

Finally, we disagree with Continental's argument that 

the limited use of the term "decontamination" in the DPH or CDC 

directives "proves that decontamination was not the objective" of 

those directives. Continental quotes from a section of the CDC 

directive that uses the word "decontamination" in suggesting that 

extremely elevated temperatures (above 158 degrees Fahrenheit) may 

be an effective form of eliminating COVID-19 contamination but 

noting such a strategy "is not generally recommended and is not 

realistic for occupied spaces." Continental argues that this 

discussion indicates the CDC believed COVID-19 decontamination to 

be unattainable. This is an overreading of the CDC document. Over 

ten pages, the CDC articulates a range of strategies to reduce the 

risk of contracting COVID-19 in indoor spaces, including 

improvements to ventilation systems and the use of ultraviolet 

germicidal irradiation lights. That the CDC counseled against one 

decontamination method is not an indication that it believed 

decontamination by any method to be impossible.

III. CONCLUSION

For all these reasons, we AFFIRM IN PART, REVERSE IN 

PART, and REMAND for further proceedings. The parties shall bear 

their own costs.