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                                                                 (Exhibit 10.12)


January 24, 2000


John D. Vollaro
26 Old Orchard Hill Lane
Greenwich, Connecticut  06831

Dear John:

In recognition of your many years of service and highly valued contributions, I
am pleased to set forth our mutual agreement regarding your resignation as
President and Chief Operating Officer of W.R. Berkley Corporation (the
"Company").

1.        Your resignation from the Company as President and Chief Operating
          Officer will be effective as of the close of business on March 1,
          2000.

2.        You will continue to have the use of your current office and
          secretarial arrangements through March 1, 2000. Thereafter, at your
          request, the Company will provide a temporary office for your use
          until the earlier of one year from the date hereof or the date on
          which you commence other employment.

3.        The Company will pay you annual compensation at the rate of $620,000
          per year for the period commencing on March 1, 2000 and terminating on
          February 28, 2001 and at the rate of $650,000 per year for the period
          commencing on March 1, 2001 and terminating on February 28, 2003. Such
          payments will be made on a biweekly basis on the Company's regular
          payroll cycle.

4.       The Company will make additional payments to you of $300,000 on January
         1, 2001 and $300,000 on January 1, 2002; provided, however, that you
         will not be entitled to the payment of $300,000 on January 1, 2002 (the
         "Second Installment Payment") if, prior to such date, you have
         commenced other employment, whether or not you continue to be employed
         on January 1, 2002. For purposes of this letter agreement, "other
         employment" shall include any services as an employee, independent
         contractor, consultant or advisor other than Limited Consulting
         Services. Limited Consulting Services means services provided by you to
         any one or more unrelated

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January 24, 2000
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         employers or businesses (other than the Company) prior to or as of
         January 1, 2002 which (i) consist solely of consultation and advice
         directed to specific aspects of the business or affairs of such
         employer or business (each, with its affiliates, an "Employer") and not
         to the business or affairs of the Employer, or of an operating unit or
         segment thereof, as a whole; (ii) do not extend, for any Employer, for
         a period of more than 120 days, whether or not consecutive; (iii) do
         not involve or result in your employment by an Employer, or the
         provision by you of consulting or advisory services (other than Limited
         Consulting Services) to such Employer, or your becoming an officer or
         director of such Employer, in each such case at any time prior to March
         1, 2003; (iv) do not involve or result in an agreement or arrangement
         (whether or not in writing), at any time prior to March 1, 2003, for
         your employment by, or your provision of consulting or advisory
         services to, or your becoming an officer or director of, an Employer;
         (v) do not result in your being eligible for benefits from the Employer
         of a kind referred to in the second sentence of paragraph 8 hereof; and
         (vi) do not preclude you from performing your obligations under
         paragraph 7 hereof. You will, prior to performing Limited Consulting
         Services for any Employer, advise the Company in writing of the name of
         such Employer (except that you need not advise the Company of the name
         of an Employer that does not engage in any business that is competitive
         with any business of the Company) and the nature and principal terms of
         such Limited Consulting Services and shall certify in writing that such
         services will constitute Limited Consulting Services hereunder. In the
         event that the Chairman of the Board of the Company believes that any
         services so to be provided by you should not be deemed to be Limited
         Consulting Services, such matter shall be referred for resolution to
         Jack H. Nusbaum, whose determination with respect thereto shall be
         final and binding upon you and the Company, and each of you and the
         Company agrees not to challenge such determination in any action or
         proceeding. In the event of a breach by you of any of the provisions of
         this paragraph 4, or if you should receive any payment or benefits
         under this letter agreement to which you are not entitled because you
         commenced other employment, and without limiting any other rights or
         remedies available to the Company with respect to such breach, the
         Company shall be entitled to (i) recover the Second Installment
         Payment, if already made, together with the costs of any such benefits,
         and/or (ii) without duplication of any recovery under clause (i), cease
         making payments under this letter agreement provided that the amount of
         payments ceased being made shall

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January 24, 2000
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         not exceed the amount of the Second Installment Payment plus the amount
         of any such costs.

5.        Options to purchase shares of the Company's common stock granted to
          you under the W.R. Berkley Corporation First Amended and Restated 1992
          Stock Option Plan which shall have vested as of the earlier of the
          dates hereinafter referred to shall be canceled and of no force or
          effect from and after the earlier of March 1, 2003 or the date on
          which you commence other employment, and, except as otherwise provided
          herein, prior to such cancellation shall continue to be subject to the
          terms and conditions of the option agreements between you and the
          Company pursuant to which such options were granted. You will not be
          granted any options after the date of this letter agreement.

6.        Your active responsibilities as an officer of the Company will
          terminate immediately and your regular employment with the Company
          will terminate effective as of the close of business on March 1, 2000.
          To the extent otherwise eligible, you will continue to participate in
          all Company benefit plans through that date.

7.       The Company will distribute your accumulated benefits under the
         Company's Profit Sharing Plan, Deferred Compensation Plan and Benefit
         Replacement Plan in accordance with each Plan's provisions and, to the
         extent consistent therewith, per your written direction. Anything
         herein to the contrary notwithstanding, to the extent that a
         distribution of your accumulated benefits under the terms any of the
         foregoing plans is conditioned on your termination of employment with
         the Company, you will not be allowed to receive a distribution from
         such plan until your employment has terminated as provided in paragraph
         8 hereof. You acknowledge and agree that you will not be entitled to
         any distribution of benefits accrued as of the date of this letter
         agreement under the Company's Annual Incentive Compensation Plan and
         hereby waive any right to any such benefits. You further acknowledge
         and agree that all outstanding Units (as therein defined) awarded to
         you under the Company's Long-Term Incentive Compensation Plan shall be
         canceled and all of your rights with respect thereto and under such
         plan shall expire upon the date of this letter agreement.

8.       From March 1, 2000 until the earlier of March 1, 2003 or the date on
         which you commence other employment, you will have the status of
         standby employee but you hereby waive any right you have to participate
         during such period in the Company's Profit

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January 24, 2000
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         Sharing Plan, Deferred Compensation Plan, Benefit Replacement Plan,
         Annual Incentive Compensation Plan and Long-Term Incentive Compensation
         Plan, and in all of the Company's other executive compensation or
         benefit plans, other than the Company's Flexible Compensation Plan, in
         which you will have the right to continue to participate during such
         period. During such period, the Company will provide you with continued
         medical, term life insurance and long-term disability benefits
         equivalent to that (and at the same cost basis to you) provided for
         other employees or will reimburse you for the cost of comparable
         coverage. Thereafter, you will be able to elect continuation coverage
         for yourself and your covered dependents under the Company's medical
         plan in accordance with the Consolidated Omnibus Budget Reconciliation
         Act of 1986, as amended ("COBRA"). The foregoing provisions are not
         intended to affect your rights, if any, under the Company's group term
         life insurance plan to convert such coverage to individual coverage at
         your expense upon termination of employment. At the time your status as
         a standby employee terminates as provided herein, you shall not be
         entitled to any form of termination pay or other benefit under any
         severance benefit plan or similar arrangement for former employees of
         the Company. You acknowledge and agree that as of March 1, 2000, you
         will not, except as otherwise expressly provided in this letter
         agreement, be entitled to any bonus, commission, fees, vacation pay or
         other payment (other than any accrued salary) from the Company or any
         of its subsidiaries or affiliates for any period. As a standby
         employee, you agree to furnish to the Company your best advice,
         information, judgment and knowledge with respect to the operations of
         the Company's businesses. You shall furnish such advice at the request
         of the Company's Chairman of the Board at mutually agreeable times. You
         may furnish your services in person, by telephone or other means of
         electronic communication during normal business hours.

9.       Simultaneously herewith, you will execute the General Release in the
         form annexed hereto as Attachment 1 and made a part hereof.

10.       Simultaneously herewith, you will deliver your resignation from
          various boards and committees in the form annexed hereto as Attachment
          2 to be effective as of the date set forth therein.

11.       This letter agreement and the annexed General Release and resignation,
          and all of our respective rights thereunder, shall be binding upon,
          inure to the benefit of, and be

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January 24, 2000
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         enforceable by, the parties hereto and their respective successors,
         assigns, personal or legal representatives, executors, administrators,
         heirs, distributees, devisees and legatees. If you should die while any
         amounts would still be payable to you hereunder, all such amounts shall
         be payable in accordance with the terms of this letter agreement to
         your estate, but your rights under this letter agreement are otherwise
         non-transferable.

12.       You agree that, without the prior written consent of the Company, you
          will not disclose or use any non-public confidential information of
          the Company disclosed to or learned by you during the course of your
          employment so long as such information is not publicly known or
          available, except for such disclosures as are otherwise required by
          law. You further agree that you will not make any statements at any
          time that disparage the reputation of the Company or its officers. The
          Company, on behalf of itself and its executive officers, agrees that
          it will not make any statements at any time that disparage your
          reputation.

13.      Unless the Company has specifically consented thereto in writing, you
         agree not to solicit, induce or knowingly hire, or to cause, or
         recommend to, any entity with which you are affiliated to solicit,
         induce or hire, or to make any such entity aware of the qualifications
         of, any key employee employed (or formerly employed within six months
         prior to the date of solicitation, inducement or hiring) by the
         Company, during the period beginning on the date hereof and ending six
         months from the date the final payment is made to you pursuant to
         paragraph 3 of this letter agreement. For purposes of this letter
         agreement, a key employee means any officer of the Company and any
         other person employed by the Company who was a participant in any stock
         option, stock bonus, stock loan, stock purchase or similar stock plan
         of the Company during the one year period prior to the date of
         solicitation, inducement or hire.

14.      At all times, you agree, for so long as this letter agreement is
         otherwise confidential, to keep confidential both the fact of and the
         terms of this letter agreement, and you agree not to disclose, display,
         discuss or make public in any way its terms with anyone except members
         of your immediate family and except as may be required to your
         certified public accountant, tax preparer, attorney or where compelled
         by law. Before disclosing this letter agreement to any person at any
         time when this letter agreement is otherwise confidential, you agree to
         advise the party to whom disclosure is made that such

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January 24, 2000
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         information is confidential and such party is not to the disclose same.
         You and the Company will consult and cooperate with each other,
         consistent with applicable law, with a view to agreeing in a timely
         manner on the contents of any press release or other public
         announcement to be made by the Company with respect to this letter
         agreement.

15.      You acknowledge that the payments and benefits provided under this
         Agreement are in consideration for the obligations you have undertaken
         in paragraphs 12, 13 and 14 hereof and your execution of the General
         Release annexed hereto. You agree that the Company will suffer
         irreparable damage if the provisions of any of such paragraphs are
         breached and that in such event, and in the event you revoke the
         General Release in accordance with the terms thereof, the Company shall
         be entitled as a matter of right to terminate all remaining payments
         and benefits provided under this Agreement, and you shall have no
         further right thereto. Upon demand by the Company, you shall
         immediately repay to the Company the gross, pre-tax amount of all
         payments made to you hereunder prior to such time. You agree that the
         amount of such prior and future payments shall constitute liquidated
         damages for the breach of this letter agreement.

16.      Should any provision of this letter agreement or of the annexed General
         Release be held invalid or illegal, such illegality shall not
         invalidate the whole of this letter agreement, or General Release, but
         rather such letter agreement and General Release shall be construed as
         if it did not contain the illegal part, and the rights and obligations
         of the parties shall be construed and enforced accordingly. If any of
         the restrictions contained herein shall be deemed to be unenforceable
         by reason of the extent, duration or geographical scope thereof, or
         otherwise, then the court making such determination shall have the
         right to reduce such extent, duration, geographical scope or other
         provisions hereof, and in its reduced form this letter agreement shall
         then be enforceable in the manner contemplated hereby.

17.       The payments due to you hereunder shall be subject to reduction to
          satisfy all applicable Federal, state and local withholding tax
          obligations. The Company makes no representation regarding the
          taxation of any payments or benefits to be provided to you under, or
          the tax ramifications of any of the matters contemplated by, this
          letter agreement. It is your obligation and responsibility to
          determine whether any such payment or benefit is includible in gross
          income for Federal, state and local income tax purposes.

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January 24, 2000
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18.       Reference in this letter agreement to the Company shall include all
          subsidiaries and affiliates of the Company and for purposes of this
          letter agreement and the General Release, the term "affiliate" shall
          be limited to entities that are engaged in the business of insurance
          or insurance services and are directly or indirectly controlled by or
          under common control with the Company.

19.       You will promptly provide the Company with a notice of your acceptance
          of other employment and the commencement date thereof.

YOU EXPRESSLY ACKNOWLEDGE, REPRESENT AND WARRANT THAT YOU HAVE READ THIS LETTER
AGREEMENT AND THE GENERAL RELEASE CAREFULLY; THAT YOU FULLY UNDERSTAND THE
TERMS, CONDITIONS AND SIGNIFICANCE OF THIS LETTER AGREEMENT AND THE GENERAL
RELEASE; THAT THE COMPANY HAS ADVISED AND URGED YOU TO CONSULT WITH YOUR
ATTORNEY CONCERNING THIS LETTER AGREEMENT AND THE GENERAL RELEASE; THAT YOU HAVE
BEEN REPRESENTED BY COUNSEL AND HAVE HAD A FULL OPPORTUNITY TO REVIEW THIS
LETTER AGREEMENT AND THE GENERAL RELEASE WITH YOUR ATTORNEY AND HAVE DONE SO;
THAT YOU HAVE HAD AMPLE OPPORTUNITY TO NEGOTIATE THROUGH YOUR ATTORNEY; AND THAT
YOU HAVE EXECUTED THIS LETTER AGREEMENT VOLUNTARILY, KNOWINGLY AND WITH SUCH
ADVICE FROM YOUR ATTORNEY AS YOU HAVE DEEMED APPROPRIATE.

You acknowledge that you have 21 days to review and consider the terms described
above and the financial consequences to you and your family. With the advice of
the Company, you have had a reasonable opportunity to consider advice from your
legal counsel before signing this letter. Fully understanding the above terms,
you are entering into this letter agreement knowingly and voluntarily.

If the foregoing is acceptable to you, please sign, date and return the attached
copy of this letter to me no later than February 14, 2000. Once you have signed
the letter, our agreement will not take effect or be enforceable until seven
days after your signing this letter and you may revoke it at any time prior to
the end of the

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January 24, 2000
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seventh day after your signing by delivering a written revocation to the
undersigned.

Sincerely,


W.R. BERKLEY CORPORATION



By: ____________________________
     William R. Berkley
     Chairman of the Board and
       Chief Executive Officer



AGREED: _______________________________                        _______________
        John D. Vollaro                                        Date

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                                                                    ATTACHMENT 1


                                 GENERAL RELEASE

         In consideration of the payments, benefits, agreements, and other
consideration to be provided to John D. Vollaro by W.R. Berkley Corporation as
described in the letter agreement between W.R. Berkley Corporation and John D.
Vollaro dated January 24, 2000 (the "Agreement") to which this Release is
annexed, John D. Vollaro for himself and for his heirs, executors,
administrators, and their respective successors and assigns (collectively
"Vollaro") hereby releases and forever discharges W.R. Berkley Corporation, and
all of its subsidiaries, affiliates, divisions, officers, directors, employees,
agents, successors and assigns (hereinafter collectively referred to as
"Berkley"), and all plan administrators and trustees of employee benefit plans
maintained by Berkley, of and from all or any manner of actions, causes and
causes of actions, suits, debts, obligations, damages, complaints, liabilities,
losses, covenants, contracts, controversies, agreements, promises, variances,
trespasses, judgments and expenses (including attorneys' fees and costs),
executions, claims and demands whatsoever at law or in equity (such actions,
etc., being referred to herein as "Actions"), specifically including by way of
example but not limitation, Title VII of the Civil Rights Act of 1964, as
amended, the Civil Rights Act of 1866, the Age Discrimination in Employment Act
(ADEA), the Employee Retirement Income Security Act of 1974, as amended (ERISA),
the Americans with Disabilities Act, any and all

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Connecticut fair employment, employment discrimination and human rights laws,
claims for wrongful discharge, personal injury, defamation, mental anguish,
injury to health and reputation and any and all claims and rights under all
foreign and United States federal, state, local and decisional law and
ordinances, including all those concerning equal employment, which Vollaro ever
had, now has, or which Vollaro hereafter can, shall or may have for, upon or by
reason of any matter, cause or thing whatsoever, arising on or prior to the
effective date hereof, in the course of, or in any way related to, his
employment by or termination of employment from Berkley. Vollaro takes this
action fully aware of his rights under the laws of the United States (and any
state thereof) and voluntarily waives such rights. The provisions of any laws
providing in substance that releases shall not extend to claims which are
unknown or unsuspected at the time, to the person executing such release, are
hereby waived. Vollaro hereby agrees never individually or with any person to
file, commence or aid in any fashion the filing of, any charges, lawsuits or
complaints with any governmental agency or against Berkley or any of the parties
released by him in this General Release with respect to any of the matters
covered by this Release.

         Notwithstanding the foregoing, by signing this Release, Vollaro shall
not have relinquished (i) his right to indemnification for acts occurring or
liabilities arising on or prior to March 1, 2000, including any right for
reimbursement of expenses (including, without limitation, attorneys' fees and


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costs) from Berkley under charter provision, by law or insurance arrangement or
under applicable law with respect to the conduct of Vollaro, or any claim
asserted against Vollaro, in his capacity as a director, officer or employee of
Berkley or as a trustee of any Berkley employee benefit plan, or as a member of
any Berkley company committee or Berkley employee benefit plan committee, which
right shall be no greater nor less than the indemnification rights of other
Berkley officers and directors, (ii) Vollaro's right to payments or benefits
under, or to enforce the provisions of, this Release or the Agreement to which
it is annexed or (iii) any rights or claims Vollaro may have under ADEA that
arise after the date on which he executes this Release.

         Berkley hereby releases and forever discharges Vollaro from all or any
manner of Actions which Berkley ever had, now has, or which Berkley hereafter
can, shall or may have for, upon or by reason of any activities undertaken
within the scope of Vollaro's employment with the Company and in compliance with
applicable laws, regulations and written Company policies, on or prior to the
effective date hereof; provided, however, that Berkley shall not thereby release
Berkley's right to enforce the provisions of this Release or the Agreement to
which it is annexed.

VOLLARO EXPRESSLY ACKNOWLEDGES, REPRESENTS AND WARRANTS THAT HE HAS READ THIS
RELEASE CAREFULLY; THAT HE FULLY UNDERSTANDS THE TERMS, CONDITIONS AND
SIGNIFICANCE OF THIS RELEASE; THAT THE COMPANY HAS ADVISED AND URGED HIM TO
CONSULT WITH HIS ATTORNEY CONCERNING THIS RELEASE; THAT HE HAS BEEN REPRESENTED
BY COUNSEL AND HAS HAD A FULL OPPORTUNITY TO REVIEW THIS RELEASE WITH HIS
ATTORNEY AND HAS DONE SO; THAT HE HAS HAD AMPLE OPPORTUNITY TO NEGOTIATE THROUGH
HIS ATTORNEY; THAT THE PAYMENTS AND BENEFITS THAT ARE TO BE PROVIDED TO HIM
UNDER THE AGREEMENT TO WHICH THIS RELEASE IS ANNEXED ARE IN ADDITION TO ANYTHING
OF VALUE TO WHICH HE IS ALREADY ENTITLED; AND THAT HE HAS EXECUTED THIS RELEASE


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VOLUNTARILY, KNOWINGLY AND WITH SUCH ADVICE FROM HIS ATTORNEY AS HE DEEMED
APPROPRIATE.


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         IN WITNESS WHEREOF, John D. Vollaro and W.R. Berkley Corporation have
executed this General Release this 24th day of January, 2000, John D. Vollaro
having had the opportunity to review it with counsel of his choice and having
had the right to consider it for twenty-one (21) days and seven (7) days after
execution to revoke it.


AGREED: ________________________________                       ________________
        John D. Vollaro                                             Date



                  W.R. BERKLEY CORPORATION

                  By: _____________________________            ________________
                      William R. Berkley                       Date
                      Chairman of the Board and
                        Chief Executive Officer


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                                                                    ATTACHMENT 2



                                 John D. Vollaro
                            26 Old Orchard Hill Lane
                          Greenwich, Connecticut 06831


                                                                January 24, 2000


William R. Berkley
Chairman and Chief Executive officer
W.R. Berkley Corporation
165 Mason Street
P.O. Box 2518
Greenwich, CT 06836-2518

Dear Bill:

In connection with my resignation as President and Chief Operating Officer of
W.R. Berkley Corporation (the "Company") this will confirm my irrevocable
resignation, effective March 1, 2000, from the Board of Directors of the
Company, all committees thereof, all boards of directors of the Company's
subsidiaries and affiliates, and all company committees, trusteeships and
employee benefit plan committees on which I am currently serving with respect to
the Company, all of its subsidiaries and affiliates, and their related employee
benefit plans.

Very truly yours,