**Exhibit 10.31**
**RETIREMENT AND CONSULTING AGREEMENT**
     **THIS RETIREMENT AND CONSULTING AGREEMENT**(the “Agreement”) is entered intoas of June 15, 2004, by and among Bruce A. Esselborn (“Executive”), FairfaxFinancial Holdings Limited, a Canadian corporation (“FFH”), Fairfax Inc., aWyoming corporation (“Fairfax”), and Crum & Forster Holdings Corp., a Delawarecorporation (the “Company”) (collectively, the “Companies”).
     **WHEREAS,**Executive was employed as Chief Executive Officer and Chairman ofthe Board of Directors (the “Board”) of Crum & Forster Holding Inc. (“C&FHolding”) and the insurance operating companies of the Company (the “OperatingCompanies”);
     **WHEREAS,**Executive resigned as (i) Chief Executive Officer of C&F Holdingand the Operating Companies effective April 2, 2004, and (ii) Chairman of theBoard of C&F Holding and the Operating Companies effective June 15, 2004;
     **WHEREAS,**Executive retired from active employment with C&F Holding and theOperating Companies effective June 15, 2004; and
     **WHEREAS**, Executive has agreed to provide consulting services to Fairfax asrequested from July 1, 2004 through December 31, 2004.
     **NOW, THEREFORE,**in consideration of the mutual covenants and agreementsdescribed below, and for other good and valuable consideration, the receipt andsufficiency of which are acknowledged, the parties hereto agreed as follows:
**I.** **Employment and Retirement**
 1. **Effective Date.**This Agreement shall be effective asof the Retirement Date, as defined below.  2. **Resignation and Retirement.**Executive hereby confirmshis previously announced resignation as Chairman of the Board andChief Executive Officer of C&F Holding and the OperatingCompanies and retires from active employment therewith effectiveas of June 15, 2004 (the “Retirement Date”). C&F Holding and theOperating Companies have accepted Executive’s retirement fromactive employment effective as of the Retirement Date.  3. **2004 Cash Bonus.**Executive will receive from theCompany a pro-rata 2004 cash bonus for services rendered duringthe 2004 calendar year as determined by Fairfax in its solediscretion (the “2004 Bonus”). Executive is entitled to receivethe 2004 Bonus only if all members of the Company’s executivemanagement team are granted a 2004 cash bonus.
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 4. **Restricted Stock.**The FFH restricted common stockgranted to Executive pursuant to his Employment Agreement datedOctober 1, 1999, will continue to vest in accordance with thevesting schedule provided therein, pursuant to which all such shares of FFH restricted common stock will be fully vested onOctober 1, 2004. All such shares of FFH restricted common stockwill be delivered to Executive by FFH net of withholding taxes.  5. **Benefits.**
 (a) Life Insurance and Medical Benefits. Followingthe Retirement Date, the Company will provide Executive with(i) life insurance equal to the maximum amount available tothe Executive under the Operating Companies’ basic lifeinsurance coverage prior to the Retirement Date and (ii)medical benefits substantially similar to those medicalbenefits provided to Executive prior to the Retirement Datewith continued contributions toward such medical benefits byExecutive in a manner and percentage similar to that prior tothe Retirement Date. To the extent Executive becomes eligiblefor life insurance or medical benefits through a new employer,Executive shall promptly advise the Company in writing and theobligations to provide life insurance or medical benefits inaccordance with this Section shall immediately cease.  (b) Income Tax Preparation. The Companies willreimburse Executive for the cost of the preparation ofExecutive’s 2004 income tax returns.
**II.** **Consulting Relationship**
 1. **Consulting Services.**In recognition of the significantvalue to Fairfax of the availability of a person of Executive’sexperience, Fairfax hereby agrees to engage Executive as aconsultant to it for the period beginning July 1, 2004 throughDecember 31, 2004 (the “Consulting Period”), and Executive herebycommits to serve Fairfax as a consultant during the ConsultingPeriod. During the Consulting Period, Executive will consultwith management of Fairfax as requested from time to time.During the Consulting Period, Executive will be free to pursueand accept any employment or consulting arrangement with anyother entity, so long as that entity is not a Competitor, asdefined in Section III.2 of this Agreement.  2. **Compensation.**Executive will be paid by Fairfax aretainer fee equal to $250,000 U.S. for consulting servicesrendered during the Consulting Period (the “Retainer Fee”),subject to further payment for extraordinary engagements asmutually agreed upon by Fairfax and Executive. The Retainer Feewill be paid by check either in lump sum or other periodicpayments as determined by Fairfax.  3. **Reimbursement of Expenses.**Fairfax will pay orreimburse Executive for all reasonable business expenses actuallyincurred or paid by the Executive during the Consulting Periodunder this Agreement in performance of Executive’s
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   consulting services hereunder, in accordance with the customaryreimbursement policies of Fairfax for its senior executiveemployees.
**III.** **General Provisions**
 1. **Indemnity.**The Companies and/or one or more of theirsubsidiaries will indemnify and provide a defense to Executive tothe fullest extent permitted by law and their respective by-lawswith respect to any claims arising out of the performance ofExecutive’s duties as an employee, director or officer of, orconsultant to, any of such indemniters, consistent with theindemnity and defense provided to other officers, directors orconsultants of the Companies.  2. **Non-Competition.**During the Consulting Period,Executive shall not, without the prior written consent ofFairfax, engage in any business or activity in competition withthe Companies, whether as an employee, consultant, partner,principal, agent, representative or in any other individual,corporate or representative capacity, or render any services orprovide any advice to any business, activity or person engaged inthe business of insurance (including reinsurance) or theprovision of insurance related services (a “Competitor”).  3. **Miscellaneous Provisions.**
 (a) Assignability; Binding Nature. This Agreementshall be binding upon and inure to the benefit of the partiesand their respective successors, heirs and assigns. No rightsor obligations under this Agreement may be assigned ortransferred except upon prior written approval of all partieshereto.  (b) Notices. Notices and all other communicationscontemplated by this Agreement shall be in writing and shallbe deemed to have been duly given when personally deliveredor, if sent by prepaid overnight courier or by U.S. registeredor certified mail, return receipt requested and postageprepaid, on the later of delivery or two (2) business daysafter being so sent. In the case of Executive, mailed noticesshall be addressed to Executive at the home address thatExecutive most recently communicated to the Companies inwriting. In the case of the Companies, mailed notices shallbe addressed to their respective corporate headquarters, andall notices shall be directed to the attention of their ChiefExecutive Officers.  (c) Governing Law. This Agreement shall be deemed tobe made in, and in all respects be interpreted, construed andgoverned by and in accordance with the laws of, the State ofNew Jersey.  (d) Modifications; Waivers. The waiver by any partyhereto of a breach of any provision of this Agreement by anyother party hereto shall not operate or be construed as awaiver of any prior or subsequent breach of
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   the same provision by the other party. No waiver ormodification of any provision of this Agreement shall bevalid unless in writing and duly executed by each of theparties hereto.  (e) Entire Agreement. This Agreement is intended bythe parties hereto to be the final expression of theiragreement with respect to the subject matter hereof and is thecomplete and exclusive statement of the terms thereof,notwithstanding any representations, statements or agreementsto the contrary heretofore made.  (f) Counterparts. This Agreement may be executed incounterparts, each of which shall be deemed to be an originalbut all of which together shall constitute one and the sameinstrument.
     **IN WITNESS WHEREOF,**the parties hereto have executed this Agreement as ofthe date first written above.   Crum & Forster Holdings Corp. Fairfax Financial Holdings LimitedBy: /s/ Mary Jane RobertsonName:  Mary Jane Robertson