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                                                                   EXHIBIT 10(8)


                              CONSULTING AGREEMENT


         This Consulting Agreement (the "Agreement") is made as of March 14,
2001, by and between CNA SURETY CORPORATION (the "Company"), and ROBERT E. AYO
(the "Consultant").

                                    RECITALS


         A. The Consultant intends to resign his employment with the Company on
or before April 1, 2001 on account of retirement.

         B. The Consultant has developed expertise regarding the business of the
Company and the Company desires to benefit from Consultant's experience. The
Company desires to engage the Consultant, and the Consultant is willing to be so
engaged, to provide services (the "Consulting Services") to the Company as
requested by the Company, on the terms and subject to the conditions set forth
herein.

         NOW, THEREFORE, in consideration of the Recitals (which are
incorporated herein by reference), the agreements hereafter set forth and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

                                   AGREEMENTS

         1. Engagement. The Company hereby engages the Consultant and the
Consultant agrees to be engaged as an independent consultant, for the purposes
and upon the terms and conditions hereinafter set forth. The Company
acknowledges that it is relying on Consultant's professional judgment in
performing the Consulting Services and that it will have no right to control or
direct the details, manner or means by which Consultant performs the Consulting
Services.

         2. Independent Consultant Status. The relationship hereby created
between the Company and the Consultant shall be that of an independent
contractor and shall not be considered as creating the relationship of
employer-employee, partnership, principal-agent, joint venture or association of
any other kind.

         3. Term and Termination. The term of Consultant's engagement under this
Agreement shall be for the one-year period commencing on the day following the
Consultant's resignation of employment with the Company on account of retirement
and ending one year thereafter (the "Term"); provided however, if the
Consultant's resignation of employment occurs after April 1, 2001 this Agreement
shall be null and void and the Consultant shall not be entitled to any of the
benefits described hereunder.

         4. Duties. Throughout the Term, the Consultant shall be available to
perform Consulting Services in Chicago, Illinois and shall devote such time
during normal business hours to the Consulting Services as the Company
reasonably requests, provided that the times at which the Consultant provides
Consulting Services shall be reasonably convenient to the Consultant.
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The Consultant shall provide Consulting Services to the best of his ability,
utilizing all of his skills and experience.

         5. Compensation. As full compensation for the Consulting Services, the
Company during the Term shall pay the Consultant his annual base salary as in
effect on the date of his termination of employment in equal biweekly
installments.

         6. Employee Benefits. Consultant acknowledges that he shall not be
entitled to participate during the Term by reason of this Agreement in any of
the Company's employee benefit plans, practices, policies and programs.
Consultant hereby expressly waives his right (if any) to participate in any such
employee benefit plans, practices, policies and programs, irrespective of his
status during the Term or any change therein.

         7. Taxes. Consultant acknowledges that he is retained as an independent
contractor and that the Company will not withhold federal or state income taxes
from the compensation due under this Agreement, will not contribute on his
behalf under the Federal Insurance Contributions Act or the Federal Unemployment
Tax Act or any comparable state program, and will not withhold Consultant's
share of contributions to such programs from his compensation. Consultant agrees
that he is exclusively liable for the payment of federal and state income taxes,
including estimated taxes, and the payment of any self-employment tax.

         8. Limitation on Authority. Consultant acknowledges that he is not an
employee and not an agent of the Company. Consultant has no authority to, and
shall not, incur any obligation on behalf of the Company or cause the Company to
become liable for same, without the express written consent of the Company.
Consultant shall not hold himself forth as an agent of the Company and shall not
knowingly permit any person to believe, assume or act as if Consultant is an
agent of the Company authorized to bind the Company to any obligation
whatsoever.

         9. Death or Disability. If during the Term of this Agreement, the
Consultant dies or becomes disabled (as defined in the Company's Long Term
Disability Plan) the payments described in Section 5 of this Agreement shall
continue to be made to the beneficiary designated by the Consultant on such form
as may be approved by the Company and, if no beneficiary is so designated, to
the Consultant's estate.

         10. Confidentiality. The Consultant hereby agrees to keep the terms and
provisions of this Agreement confidential.

         11. Miscellaneous.

             (a) This Agreement shall inure to the benefit of, and be binding
upon (to the extent applicable), the parties hereto and their respective
successors, heirs, representatives and assigns, as the case may be; provided,
however, that no party shall assign or delegate this Agreement or any other
rights or obligations created hereunder, except that the Company shall have the
unrestricted right to assign this Agreement and all or any part of its rights
hereunder and to delegate all or any part of its obligations hereunder to any of
its affiliates.


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             (b) Nothing in this Agreement shall confer upon any person not a
party to this Agreement, or the legal representatives of such person, any rights
or remedies of any nature or kind whatsoever, under or by reason of this
Agreement.

             (c) All notices, requests, instructions or other communications
given or made pursuant hereto shall be in writing and hand delivered, sent by
nationally recognized overnight or next day delivery service, sent by facsimile
(with receipt confirmation), or mailed by registered or certified mail (postage
prepaid, return receipt requested) to the parties at the following addresses;
receipt shall be deemed to have occurred on the earlier of the date of actual
receipt or confirmation by the sender that the delivery or transmission was
completed or that the addressee has changed its address or facsimile number
without giving the other party notice hereunder:

                 (i)   If to the Company, to:

                       General Counsel
                       CNA Surety Corporation
                       CNA Plaza - 13S
                       Chicago, Illinois 60685

                       (312) 822-3895 (telephone)
                       (312) 755-3737


                 (ii)  If to the Consultant, to:

                       Robert E. Ayo
                       172 Sunset Ave.
                       Glen Ellyn, IL. 60137
                       (630) 469-4208  (telephone)


or to such other persons or at such other addresses as shall be furnished by any
party by like notice to the others.

             (d) This Agreement represents the entire agreement and
understanding of the parties hereto with reference to the matters set forth
herein, and no representations, warranties or covenants have been made in
connection with this Agreement other than those expressly set forth herein. This
Agreement supersedes all prior negotiations, discussions, correspondence,
communications, understandings and agreements between the parties relating to
the subject matter of this Agreement and all prior drafts of this Agreement, all
of which are merged into this Agreement. Notwithstanding the foregoing, the
provisions of the Employment Agreement dated as of January 1, 2000 by and
between the Company and Consultant which survive the Consultant's termination of
employment shall continue in accordance with the terms of the Employment
Agreement.

             (e) This Agreement may be amended, superseded, cancelled, renewed
or extended, and the terms hereof may be waived, only by a written instrument
signed by the parties


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hereto or, in the case of a waiver, by the party waiving compliance. No delay on
the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof; nor shall any waiver on the part of any party
of any such right, power or privilege, nor any single or partial exercise of any
such right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege.

             (f) This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois, without giving effect to choice of law
principles.

         This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall be considered
one and the same agreement.


                                       CNA  SURETY CORPORATION


                                       By:
                                          --------------------------------------
                                       Name:  Mark C. Vonnahme
                                       Title: Chief Executive Officer


                                       ROBERT E. AYO



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