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                                                                  EXHIBIT 10.19

[CNA Logo]

CNA PLAZA  CHICAGO  IL  60685--0001            JAMES R. LEWIS
                                               President & CEO
                                               CNA Property & Casualty
                                               Operations
                                               Telephone   312-822-2117
                                               Facsimile   312-817-1403
                                               Internet    james.lewis@cna.com

January 13, 2003



Mr. Michael Dougherty


Dear Michael:

Because of your value to the Company as a whole, I am pleased to offer you a
special deferral bonus of $150,000 to be paid as follows: the first payment,
$50,000 less applicable withholding taxes, will be paid in the next payroll
period following you signing the agreement. Each of the two subsequent payments
will be made in August of 2003 and 2004. This special deferral bonus will be
subject to the following conditions:

1.   If the Company terminates you involuntarily for Convenience prior to August
     2005, it will pay you the unpaid portion of the special bonus immediately
     following the termination. In return you agree to abide by the Covenants
     from the date of your termination of employment with the Company. (All
     capitalized terms are defined on Attachment A.)

2.   If the Company terminates your employment involuntarily for Performance
     prior to August, 2005, it will not pay you any portion of the special
     bonuses remaining unpaid at the time of termination, and you agree to be
     bound by the Covenants from the date of your termination of employment with
     the Company.

3.   If you decide to terminate your employment voluntarily with the Company
     prior to August, 2005, or if you are terminated involuntarily for Cause,
     the Company will not pay you any portion of the special bonuses remaining
     unpaid at the time of termination, and you agree to repay the gross amount
     of any deferral bonus amounts already paid to you within the 12 month
     period prior to your termination date. You also agree to be bound by the
     Covenants following the date of your termination of employment with the
     Company.

Any payment made under the terms of this letter will require that you agree to
and sign a General Release and Settlement Agreement provided by the Company.

All other terms and conditions of your current employment with Company shall
remain in effect. Neither this document nor any other Company procedures and
communications are intended to be interpreted as a promise or guarantee of
future or continued employment. Nothing in this letter shall detract from your
right (and the Company's right) to end the employment relationship at any time.

Very truly yours,

James R. Lewis

Agreed:


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Michael Dougherty                                                      Date



Attachment A


                                   DEFINITIONS



CAUSE - i) you engage in any conduct which the Chief Executive Officer of the
Company's insurance subsidiaries (the "CEO") reasonably determines to be
fraudulent, is a substantial breach of any material provision of this letter,
constitutes willful malfeasance or gross negligence, or is inconsistent with the
dignity and character of an executive of the Company; or ii) you violate in a
material manner the rules of professional conduct or human resource policies of
the Company.

COMPANY - Continental Casualty Company, its parents, subsidiaries or
affiliates, including Western Surety Company.

CONVENIENCE - termination of your employment for a reason other than death,
disability, Cause, Performance, or due to your voluntary termination of
employment.

PERFORMANCE - A performance rating level of 4 any time (or equivalent if the
Company's performance rating changes), as determined by your management.

COVENANTS -

i)      for 12 months after the date of your termination from the Company, not
        to solicit, hire or aid anyone else in soliciting or hiring anyone who
        was employed by the Company during the last year prior to your
        termination from the Company,

ii)     to agree to be bound by the attached Confidentiality, Computer
        Responsibility and Professional Certification Agreement that you
        acknowledge that you have read and signed and,

iii)    to assist the Company, at the Company's expense, with any pending or
        threatened claims or other legal matters by or against the Company on
        matters in which you were involved during your employment with the
        Company for 24 months and, unless precluded by law, to inform the
        Company promptly if you are requested to assist or to participate in any
        legal matter against the Company.

iv)     for 12 months following termination of employment to not interfere or
        attempt to interfere with any business relationship or agreement between
        either the Company or an Affiliate and any other person or entity
        including but not limited to customers, agents, suppliers, vendors,
        contractors, employees and business partners.