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                                                                   Exhibit 10.18

                              EMPLOYMENT AGREEMENT
                              --------------------

      AGREEMENT, made and entered into this 8th day of September, 2006 by and
between Majestic Insurance Company, a California corporation (the "COMPANY"),
and John L. Sullivan ("EXECUTIVE").

                              W I T N E S S E T H:
                              --------------------

      WHEREAS, Executive has been the chief executive officer of the Company for
a number of years;

      WHEREAS, CRM USA Holdings Inc., a Delaware corporation ("CRM"), and the
shareholders of the Company's parent have entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement") of even date herewith pursuant to
which, at the Closing thereunder, CRM will indirectly acquire all of the issued
and outstanding shares of capital stock of the Company; and

      WHEREAS, the Company and CRM desire that effective upon the Closing Date
under the Stock Purchase Agreement, (the "CLOSING DATE"), Executive be employed
as the president of the Company, and Executive desires to be so employed, on the
terms and conditions set forth in this Agreement;

      NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are mutually acknowledged, the Company and Executive
(sometimes hereinafter referred to individually as a "PARTY" and together as the
"PARTIES") hereby agree to be bound in accordance with the terms of this
Agreement.

      1. Term. The term of Executive's employment under this Agreement shall
commence on the Closing Date and end on the last day of the calendar month in
which the 18th month anniversary of the Closing Date occurs (the "ORIGINAL
TERM"). The Original Term shall be automatically renewed for successive one-year
terms (the "RENEWAL TERMS") unless at least sixty (60) days prior to the
expiration o the Original Term or any Renewal Term, either the Company or
Executive notifies the other in writing that it or he elects to terminate this
Agreement at the expiration of the then current Term. "TERM" shall mean the
Original Term and all Renewal Terms, unless the Original Term or any Renewal
Term is terminated earlier in accordance herewith.

      2. Position, Duties and Responsibilities.

            (a) Generally. Executive shall serve as the President of the
Company. In such capacity, Executive shall report to the Chairman of the Board
and chief executive officer of the Company (the "CHIEF EXECUTIVE OFFICER").
Executive shall have and perform such duties, responsibilities and authorities
as are customary for a president who reports to the chief executive officer of
similar size companies and businesses as the Company. Executive shall devote
substantially all of his business time and attention (except for periods of
vacation or absence due to illness), and his best efforts, abilities, experience
and talent, to the business of the

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Company and its affiliates and shall perform such duties with respect to the
subsidiaries of the Company and with respect to CRM and its affiliates as may be
assigned to him by the Chief Executive Officer without any additional
consideration.

            (b) Other Activities. During the Term, Executive may (i) serve on
the Boards of Directors of trade associations and/or charitable organizations,
provided that Executive shall notify the Chief Executive Officer of any such
position, and on the Boards of Directors of Starboard Captive Insurance Company
and MTC Holdings unless and until the Chief Executive Officer requests that he
resign from such Boards; (ii) engage in charitable activities and community
affairs; and (iii) manage personal investments and affairs, provided that such
activities do not materially interfere with the proper performance of his duties
as President of the Company.

            (c) Place of Employment. Executive's principal place of employment
shall be the corporate offices of the Company in San Francisco, California.

      3. Base Salary. Executive shall be paid an annualized salary ("BASE
SALARY") of $350,000 in accordance with the Company's normal pay practices. The
Base Salary shall be reviewed for increase by the Compensation Committee (the
"COMPENSATION COMMITTEE") of the Board of Directors of CRM's parent, CRM
Holdings, Ltd., a Bermuda corporation ("PARENT"), no less frequently than
annually.

      4. Incentive Awards. Executive shall participate in Parent's annual
incentive compensation plan with a target maximum annual incentive award
opportunity of 75% of Base Salary ("ANNUAL INCENTIVE"), based on performance
criteria determined by the Compensation Committee on an annual basis.

      5. Long-Term Incentive Programs; Restricted Stock.

            (a) Executive shall be eligible to participate in Parent's
long--term incentive compensation programs, as determined by the Compensation
Committee, including Parent's qualified stock option plan.

            (b) At the meeting of the Board of Directors of Parent next
following the Closing Date, Executive shall be awarded a number of "restricted"
shares of common stock of Parent having a fair market value on the date of the
award equal to 75% of Executive's Base Salary, such restricted shares to vest in
three (3) equal annual installments commencing on the first anniversary of the
Closing Date.

      6. Other Payments.

            (a) Car Allowance. Executive shall receive a $800 a month car
allowance to cover the cost of owning, operating, maintaining and insuring a
motor vehicle of his choosing.

            (b) Vacation. Executive shall be entitled to five (5) weeks of paid
vacation and shall take holidays in accordance with the Company's standard
holiday schedule as amended from time to time.

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            (c) Corporate Travel. Executive shall be entitled to business class
airplane travel for all travel in connection with the performance of his duties
hereunder.

      7. Employee Benefit Programs.

      During the Term, Executive shall be entitled to participate in the
Company's employee pension and welfare benefit plans and programs as such plans
or programs may be in effect from time to time, including, without limitation,
health, medical and dental coverage (together, "WELFARE BENEFITS").

      8. Reimbursement of Business and Other Expenses.

      Executive is authorized to incur reasonable expenses in carrying out his
duties and responsibilities under this Agreement, and the Company shall promptly
reimburse him for all such reasonable business expenses, subject to
documentation in accordance with the Company's applicable policies.

      9. Termination of Employment.

            (a) Death. If Executive dies during the Term, Executive's estate
and/or beneficiaries sole remedies under this Agreement or otherwise shall be
and they shall be entitled to receive only:

                  (i) Base Salary through the date of Executive's death;

                  (ii) the balance of any incentive awards earned as of December
            31 of the prior year (but not yet paid), (together, with unpaid Base
            Salary, "ACCRUED AMOUNTS");

                  (iii) a pro rata Annual Incentive for the year in which the
            date of termination ("TERMINATION DATE") occurs assuming Target
            performance ("PRO RATA ANNUAL INCENTIVE");

                  (iv) immediate vesting of all restricted stock awards,
            unvested stock options and other unvested long-term incentive
            compensation, if any ("EQUITY ACCELERATION"); and

                  (v) such other or additional benefits then due or earned in
            accordance with applicable plans and programs of the Company
            ("ENTITLEMENTS").

            (b) Disability. The Company may terminate Executive's employment
hereunder at any time after Executive becomes "TOTALLY DISABLED." For purposes
of this Agreement, Executive shall be "TOTALLY DISABLED" upon Executive's
inability to perform his duties and responsibilities contemplated under this
Agreement for a period of more than one hundred and twenty (120) days in any
three hundred sixty-five (365) day period due to physical or mental incapacity
or impairment which is determined to be total and permanent by a physician
selected by the Company or its insurers and reasonably acceptable to Executive
or Executive's legal representative. Such termination shall become effective
five (5) days after the Company

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gives notice of such termination to Executive, or to Executive's spouse or legal
representative, in accordance with Section 14(h) of this Agreement. In the event
the Company terminates Executive's employment pursuant to this Section 9(b),
Executive's sole remedies under this Agreement or otherwise shall be and he
shall be entitled to receive only:

                  (i) All Accrued Amounts;

                  (ii) A Pro Rata Annual Incentive; and

                  (iii) All Entitlements.

            (c) Termination by the Company for Cause.

                  (i) In the event the Company terminates Executive's employment
            for Cause, Executive's sole remedies under this Agreement or
            otherwise shall be and Executive shall be entitled to receive only
            all Accrued Amounts and any Entitlements. Executive shall not be
            entitled to receive any Severance Pay (as defined in Section
            9(e)(iv) of this Agreement), and his equity awards will be settled
            in accordance with the terms and conditions of the applicable grant
            agreements.

                  (i) "CAUSE" shall mean Executive's:

                        (A) breach of Section 10 or 11 of this Agreement or
            Section 5.5 of the Stock Purchase Agreement;

                        (B) conviction of, or plea of nolo contendre to, any
            felony that is materially injurious to the Company's, CRM's or
            Parent's financial condition or reputation;

                        (C) engaging in conduct constituting misconduct or a
            knowing violation of law in carrying out his duties under this
            Agreement; or

                        (D) material failure to perform his duties hereunder.

                  (ii) A termination for "CAUSE" under Clause (C) or (D) of this
            Section 9(c)(ii) shall not take effect until Executive receives
            written notice from the Company stating in reasonable detail the
            particular act or acts or failure or failures to act constituting
            the grounds for Cause. Executive shall have ten (10) days after the
            date that such written notice has been received by him in which to
            cure such conduct and if such conduct is not cured within such ten
            (10) day period, Executive's employment hereunder shall be
            terminated for Cause at the end of such ten (10) day period without
            any further action or notice by the Company.

            (d) Voluntary Termination. In the event of a termination of
employment by Executive on his own initiative after delivery of thirty (30)
business days advance written notice, other than a termination due to death,
Disability or Retirement (as defined below), Executive

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shall be entitled to receive under this Agreement or otherwise only all Accrued
Amounts and Entitlements.

            (e) Termination by the Company without Cause or by Executive for
Good Reason. If the Company terminates Executive's employment without Cause
(which termination shall be effective as of the date specified by the Company in
a written notice to Executive), other than due to Executive's death or
Disability, or if Executive terminates his employment for Good Reason (as
defined in Section 9(g) of this Agreement), Executive's sole remedies under this
Agreement or otherwise shall be and Executive shall be entitled to receive only:

                  (i) all Accrued Amounts;

                  (ii) a Pro Rata Annual Incentive for the year in which the
            Termination Date occurs;

                  (iii) Equity Acceleration;

                  (iv) all Entitlements;

                  (v) continuation of Welfare Benefits for six (6) months; and

                  (vi) in addition, Executive shall be entitled to receive
            severance pay ("SEVERANCE PAY") in cash equal to his Base Salary for
            the lesser of twelve (12) months and the balance of the Term.

            (f) Retirement. Upon Executive's Retirement, Executive shall be
entitled to receive under this Agreement or otherwise only:

                  (i) All Accrued Amounts; and

                  (ii) a Pro Rata Annual Incentive for the year in which
            Executive's Retirement occurs.

            (g) Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings ascribed to them:

            "GOOD REASON" shall mean Executive's termination of his employment
            with the Company following the occurrence, without Executive's
            consent, of one or more of the following events (except as a result
            of a prior termination), provided such Termination by Executive is
            effected by written notice given by Executive to the Board of
            Directors of the Company (the "BOARD") within sixty (60) days after
            the occurrence of such event:

                        (A) a material diminution or change, adverse to
            Executive, in Executive's title, as set forth in Section 2(a) of the
            Agreement, or the nature of Executive's responsibilities or
            authority within the Company after delivery of written notice to the
            Board by Executive and the failure of the Company to cure

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            such diminution or change within thirty (30) days after receipt of
            such written notice;

                        (B) any decrease in (i) Executive's annual Base Salary,
            or (ii) target Annual Incentive below 75% of Base Salary;

                        (C) any other failure by the Company to perform any
            material obligation under, or breach by the Company of any material
            provision of, this Agreement that is not cured within thirty (30)
            days after the delivery of written notice to the Board by Executive,
            which notice shall specify such breach in reasonable detail;

                        (D) any material increase in the amount of travel time
            that Executive is required to undertake at the Company's request
            (without Executive's consent) in the performance of his duties
            hereunder as compared to the amount of travel time typically spent
            by Executive prior to the Closing Date; provided, however, that
            Executive shall attend such meetings of the Board of Directors of
            CRM or Parent as may be requested by the Chief Executive Officer and
            travel time with respect to such meetings shall not constitute a
            material increase within the meaning of this clause (D); or

                        (E) a relocation of the Company's corporate offices
            outside the City or County of San Francisco.

            "RETIREMENT" shall mean Executive's voluntary termination of
            employment with the Company at or after attaining age 65.

            "TARGET" shall mean with respect to the Annual Incentive, the target
            level of performance designated by the Compensation Committee for
            that relevant operating period.

            (h) Timing of Termination Pay. All Severance Pay and other payments
due Executive hereunder shall be delivered no later than fifteen (15) days after
the Termination Date, provided that if Executive is deemed to be a "key
employee" for purposes of Internal Revenue Code Section 409A ("CODE SECTION
409A"), such payments shall not be made to Executive until six (6) months after
the Termination Date if necessary to avoid incurring excise taxes under Code
Section 409A.

            (i) Mitigation and Offset. Executive has no obligation to mitigate
payments due him pursuant to this Agreement.

            (j) Release of Employment Claims. As a condition to receipt of the
payments and benefits provided for in this Agreement, Executive agrees to
execute a release, in a form reasonably satisfactory to the Company, releasing
any and all claims arising out of Executive's employment (other than enforcement
of this Agreement and Executive's rights under any of the Company's or Parent's
incentive compensation and employee benefit plans).

      10. Confidentiality; Litigation Cooperation; Non-disparagement.

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            (a) Confidentiality. During the Term and at all times thereafter,
Executive shall not disclose to anyone (except in good faith in the ordinary
course of business to a person who has a need to know such information and who
is advised by Executive to keep such information confidential) or make use of
any CONFIDENTIAL INFORMATION for his own benefit or otherwise, except in the
performance of his duties hereunder or when required to do so by legal process,
by any governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) that requires him to divulge, disclose or make accessible such
information. In the event that Executive is so ordered, he shall give prompt
written notice to the Company to allow the Company the opportunity to object to
or otherwise resist such order.

      For purposes of this Agreement, "CONFIDENTIAL INFORMATION" shall mean all
information concerning the business of the Company, CRM, Parent and their
respective affiliates relating to any of their products, product development,
trade secrets, customers, suppliers, finances and business plans and strategies.
Excluded from the definition of Confidential Information is information (i) that
is or becomes part of the public domain, other than through the breach of this
Agreement by Executive or (ii) regarding the Company's business or industry
properly acquired by Executive in the course of his career as an executive in
the Company's industry and independent of Executive's employment by the Company.
For this purpose, information known or available generally within the trade or
industry of the Company shall be deemed to be known or available to the public.

            (b) Non-Disclosure. During the Term and at all times thereafter,
Executive shall not disclose the existence or contents of this Agreement except
as otherwise publicly known and to the extent such disclosure is required by
law, by a governmental agency, in a document required by law to be filed with a
governmental agency or in connection with enforcement of his rights under this
Agreement. In the event that disclosure is so required, Executive shall give
prompt written notice to the Company to allow the Company the opportunity to
object to or otherwise resist such requirement. This restriction shall not apply
to such disclosure by Executive to members of his immediate family, his tax,
legal or financial advisors, any lender, or tax authorities, or to potential
future employers to the extent necessary, each of whom shall be advised not to
disclose such information.

            (c) Litigation Cooperation. Executive agrees to cooperate with the
Company, during the Term and thereafter (including following Executive's
termination of employment for any reason), by making himself reasonably
available to testify on behalf of the Company in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, and to assist the
Company in any such action, suit or proceeding, by providing information and
meeting and consulting with the Board or its representatives or counsel, or
representatives or counsel to the Company, as reasonably requested. The Company
agrees to reimburse Executive for all expenses actually incurred by him in
connection with the foregoing cooperation.

            (d) Non-Disparagement. Executive agrees that, during the Term and
thereafter (including following Executive's termination of employment for any
reason), he will not make statements or representations, or otherwise
communicate, directly or indirectly, in writing, orally or otherwise, or take
any action which may, directly or indirectly, disparage the Company, CRM, Parent
or any of their respective affiliates or any of the officers, directors,

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employees, advisors, businesses or reputations of any of the foregoing. The
Company agrees that, during the Term and thereafter (including following
Executive's termination of employment for any reason), the Company will not make
statements or representations, or otherwise communicate, directly or indirectly,
in writing, orally or otherwise, or take any action which may disparage
Executive or his business reputation. However, nothing in this Agreement shall
preclude either Executive or the Company from making truthful statements or
disclosures required by applicable law, regulation or legal process.

      11. Non-solicitation.

      During the period beginning with the date hereof and ending twelve (12)
months following the termination of Executive's employment with the Company for
any reason, Executive shall not encourage or attempt to persuade employees of
the Company, CRM, Parent or any their respective affiliates to terminate their
employment, nor shall Executive solicit or encourage any customers or brokers of
the Company, CRM, Parent or any of their respective affiliates, or any
corporation or other entity in a joint venture relationship (directly or
indirectly) with the Company, CRM, Parent or any of their respective affiliates,
to terminate or diminish their relationship, with the Company, CRM, Parent or
any of their respective affiliates or to violate any agreement with any of them.
During such period, Executive shall not hire, either directly or through any
employee, agent or representative, any employee of the Company, CRM, Parent or
any of their respective affiliates, or any person who was employed by the
Company, CRM, Parent or any of their respective affiliates within one (1) year
of such hiring; provided, however, that the provisions of this sentence shall
not be applicable to (a) any such employee who responds to a general
solicitation or publication that is not directed to employees of Company, CRM,
Parent or any of their respective affiliates, or (b) or any individual who
independently contacts Executive without having been approached or encouraged by
Executive or any person or entity acting on behalf or for the benefit of
Executive.

      12. Remedies.

      If Executive breaches any of the provisions contained in Section 10 or 11
of this Agreement, the Company (a) shall have the right to immediately terminate
all payments and benefits due under this Agreement and (b) shall have the right
to seek injunctive relief. Executive acknowledges that such a breach of Section
10 or 11 of this Agreement would cause irreparable injury and that money damages
would not provide an adequate remedy for the Company and hereby agrees that the
Company shall be entitled to preliminary and permanent injunctive and other
appropriate equitable relief to prevent or restrain any breach or threatened
breach of Section 10 or 11 of this Agreement without posting any bond and
without proving that monetary damages would be inadequate; provided, however,
the foregoing shall not prevent Executive from contesting the issuance of any
such injunction on the ground that no violation or threatened violation of
Section 10 or 11 of this Agreement has occurred.

      13. Miscellaneous.

            (a) Assignability; Binding Nature. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors,
heirs (in the case of Executive) and permitted assigns. No rights or obligations
of the Company under this Agreement may be

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assigned or transferred by the Company except that such rights or obligations
may be assigned or transferred in connection with the sale or transfer of all or
substantially all of the assets of the Company, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee assumes the liabilities, obligations and
duties of the Company, as contained in this Agreement, either contractually or
as a matter of law. No rights or obligations of Executive under this Agreement
may be assigned or transferred by Executive other than his rights to
compensation and benefits, which may be transferred only by will or operation of
law.

            (b) Representation. The Company represents and warrants that it is
fully authorized and empowered to enter into this Agreement and that the
performance of its obligations under this Agreement will not violate any
agreement between it and any other person, firm or organization.

            (c) Entire Agreement. This Agreement contains the entire
understanding and agreement between the Parties concerning the subject matter
hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the Parties with
respect thereto. Executive acknowledges and agrees that all employment
agreements and other compensation arrangements between him and the Company or
its parent or any other subsidiary of its parent in existence on the Closing
Date shall, effective at the close of business on the next preceding day,
automatically, without any further action by the Company, such parent, any such
other subsidiary or Executive or otherwise, terminate and be of no further force
or effect and Executive shall have no rights or remedies thereunder; provided,
however, that the provisions of this sentence shall not affect any amounts that
are fully vested and accrued as of the close of business on the day next
preceding the Closing Date under any such employment agreement or other
compensation arrangement, even if such amounts are payable after the Closing
Date.

            (d) Amendment or Waiver. No provision in this Agreement may be
amended unless such amendment is agreed to in writing and signed by Executive
and an authorized officer of the Company. Except as set forth herein, no delay
or omission to exercise any right, power or remedy accruing to any Party shall
impair any such right, power or remedy or shall be construed to be a waiver of
or an acquiescence to any breach hereof. No waiver by either Party of any breach
by the other Party of any condition or provision contained in this Agreement to
be performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by Executive or an authorized officer
of the Company, as the case may be.

            (e) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by applicable law; and any such provision or portion shall be modified
so that such provision or portion shall be enforceable so as to fulfill the
intentions of the Parties with respect thereto to the maximum extent permitted
by applicable law.

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            (f) Survivorship. The respective rights and obligations of the
Parties hereunder shall survive any termination of Executive's employment to the
extent necessary to the intended preservation of such rights and obligations.

            (g) Governing Law/Jurisdiction. This Agreement shall be governed by
and construed and interpreted in accordance with the laws of the State of
California without reference to principles of conflict of laws.

            (h) Notices. Any notice given to a Party shall be in writing and
shall be deemed to have been given when delivered personally or when received if
sent by certified or registered mail, postage prepaid, return receipt requested,
duly addressed to the Party concerned at the address indicated below or to such
changed address as such Party may subsequently give such notice of:

            If to the Company:      Majestic Insurance Company
                                    400 Second Street, Suite 200
                                    San Francisco, California 94107

            With a copy to:         Louis Viglotti, Esq.
                                    General Counsel
                                    CRM USA Holdings Inc.
                                    112 Delafield Street
                                    Poughkeepsie, New York 12601

            If to Executive:        John L. Sullivan
                                    106 Alder Avenue
                                    San Anselmo, California 94960

            (i) Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.

            (j) Counterparts. This Agreement may be executed in one or more
counterparts.

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      IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.

                                    MAJESTIC INSURANCE COMPANY

                                    By: /s/ Jay Stewart
                                       ---------------------
                                       Name: Jay Stewart
                                       Title: Chief Financial Officer

                                       /s/ John L. Sullivan
                                       ---------------------
                                       John L. Sullivan

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