The CX Chemical Co. for years released chemicals into the soil and groundwater at its facility.

The CX Chemical Co. for years released chemicals into the soil and groundwater at its facility. It agreed with the Environmental Protection Agency to remediate the contamination and notified its general liability insurance carrier, Ins. Co.

CX owned both a primary liability and an excess liability policy with Ins. Co. Ins. Co. at first denied coverage, then offered CX a $250,00 payment (towards a one million dollar remediation cost) in exchange for CX’s release of Ins. Co., from claims. The Release provides in part:

“Whereas Ins. Co. issued to CX Chemical Co. the following comprehensive general liability insurance policies for the following coverage periods:

Policy 1234 – 5/03/08 – 5/03/14

Policy 5678 – 5/03/07 – 5/03/08

Policy 9101112 – 5/03/06 – 5/03/07

Now therefore, CX Chemical Co. agrees as follows: In consideration of the payment of $250,000, receipt of which is acknowledged, CX Chemical releases, discharges and acquits Ins. Co, and its agents and all in privity with Ins. Co. from any further aims related to the pollution and contamination of the soil and Broundwater in, upon, and adjacent to CX facility.

The policies listed in the Recitals (the whereas clause) were all primary liability policies. CX later filed suit against Ins. Co. contending that Ins Co. is obligated to defend the indemnify CX pursuant to the excess liability policies. Its claim is that the release covered only its primary liability policies listed in the Recitals and the terms of the Recitals (the Now, therefore clause) refer only to those policies.

What is Ins. Co.’s defense? Which party should prevail? How should the Release have been written?