Exhibit
4.1


ZENITH
NATIONAL INSURANCE CORP.


2007
EMPLOYEE STOCK PURCHASE PLAN


1.             Purpose


The purpose of the 2007 Employee Stock Purchase Plan (“Plan”)
is to attract and retain employees of outstanding ability and to motivate them
to dedicate their maximum productive efforts to Zenith National Insurance Corp.
(“Zenith”) and its direct and indirect subsidiaries. It is contemplated that
only some of Zenith’s subsidiaries will adopt the Plan and Zenith and such
adopting subsidiaries are herein referred to collectively as the “Companies” or
individually as the “Company.” Under the Plan, certain employees of the
Companies are able to purchase conveniently and systematically Zenith’s common
stock, par value $1.00 per share (“Common Stock”), through payroll deductions
supplemented by contributions by the Companies.


2.             Definitions


For the purposes of this Plan:


(a)           “Employee”
means any person over 18 years of age who is carried on the payroll of a
Company, as a full-time employee.


(b)           “Administrator”
means the person(s) or entity designated by Zenith’s Board of Directors to
organize, oversee, run and otherwise administer the Plan. The Administrator, in
its sole discretion, may engage others to perform certain of its administrative
and recordkeeping functions.


(c)           “Participant”
means any Employee who files a written application in compliance with
Section 4(a) hereof.


(d)           “Payroll
Period” means the period from the date on which the Employee customarily
receives payment of regular salary or wages to the next successive date on
which the Employee customarily receives such payment.


(e)           “Brokerage
Firm” means any business enterprise which is lawfully entitled to deal in
securities on the over-the-counter exchange and derives a substantial portion
of its revenues from dealing in securities on major national exchanges.


(f)            “Street
Account” means an account at a Brokerage Firm that is held for the benefit of
all of the Participants in which the Common Stock purchased under this Plan is
maintained. The Administrator shall cause records to be kept, in which each
individual Participant’s interest in the Street Account is allocated to him or
her.


3.             Eligibility


Every Employee of the Companies shall be eligible to
participate in the Plan.













4.             Participation; Payroll Deductions


(a)           Each eligible
Employee may become a Participant in the Plan by filing a written application
on such form as may be prescribed by the Administrator with the respective
Company’s payroll office. Each application of an Employee shall become
effective for the first Payroll Period beginning in the calendar month next
succeeding the date on which such application is received.


(b)           The
Participant’s application shall specify the amount (the “Payroll Deduction
Amount”) the Participant elects to contribute to the Plan for each Payroll
Period and shall authorize the respective Company to withhold such amount from
the salary or wages of such Participant with respect to each Payroll Period
thereafter until such Participant’s participation in the Plan is terminated or
until the amount of such deductions shall be changed or suspended as
hereinafter provided. Notwithstanding anything to the contrary contained
herein, no more than an amount equal to twenty-five percent (25%) of a
Participant’s pre-tax salary or wages may be contributed to the Plan on an
annual calendar year basis.


(c)           A
Participant’s application may be amended, by the Participant, to increase or
decrease or to suspend the Payroll Deduction Amount; provided, however, that
(i) the Payroll Deduction Amount may be increased only once, decreased
only once and suspended only once in any calendar year and (ii) any
suspension must be for a period of not less than four (4) months and shall
continue until the Participant has notified the respective Company to recommence
payroll deductions. Each such amendment and notice shall be made by filing a
form prescribed by the Administrator with the respective Company’s payroll
offices and shall become effective for the first Payroll Period beginning in
the calendar month next succeeding the date on which such form is properly
filed.


5.             Establishment of Street Account and Purchases


The Administrator shall obtain, on an appropriate form,
permission from each Participant to direct the Brokerage Firm to purchase
Common Stock from time to time to be deposited in the Street Account pursuant
to the Administrator’s directions.


6.             Contributions by the Companies


Subject to an overall limit each calendar year of one
(1) million dollars applicable to all such total contributions by the
Companies, each Company shall contribute on behalf of each Participant employed
by it an amount (the “Company Matching Amount”) equal to twenty-five percent
(25%) of such Participant’s Payroll Deduction Amount. Upon reaching the overall
calendar year limit of one (1) million dollars, no further Company
Matching Amount shall be made to any Participant under the Plan for the
remainder of the applicable calendar year.


7.             Transmittal


Pursuant to the Plan, each Company shall accumulate on a
monthly basis and hold, without interest, the Payroll Deduction Amounts for
each Participant employed by it. All such amounts shall be delivered to the
Administrator (to be applied in accordance with the provisions of this Plan) as
promptly as possible after the close of the calendar month of withholding. Such
delivery shall be accompanied by a transmittal listing the name and Payroll
Deduction Amount and the corresponding Company Matching Amount for each
Participant. Each Company’s Matching Amount shall be delivered to the
Administrator concurrently with such transmittal.













8.             Administration


Upon receipt of the amounts and transmittal set out in
Section 7, the Administrator shall forward all of the Payroll Deduction
Amounts and the corresponding Company Matching Amounts to the Brokerage Firm
and shall direct the Brokerage Firm to purchase for each Participant as many
shares of Common Stock as such Participant’s Payroll Deduction Amount and
corresponding Company Matching Amount will permit and to deposit such Common
Stock into the Street Account.


All commissions and fees incurred as a result of the
Administrator’s directions to purchase Common Stock for a Participant shall be
borne by the Company employing such Participant.


9.             Confirmations


The Administrator shall forward to each Participant promptly
after each purchase is made pursuant to Section 8 hereof a confirmation
statement indicating the number of shares of Common Stock then acquired under
the provisions of the Plan for the Participant, the cost thereof, the dates of
acquisition, and the total number of shares credited to the Participant under
the Plan.


10.          Participants’ Sale of Common Stock


A Participant may at any time sell any or all of the
Common Stock held for his or her benefit in the Street Account.


A partial or total withdrawal or sale of the Common Stock
allocated to a Participant in the Street Account shall have no effect on the
Participant’s payroll deductions and shall not effect a termination of the
Participant’s participation in the Plan.


11.          Termination of Participation


If a Participant shall die, retire, be totally and
permanently disabled or cease to be continuously employed by any Company, such
Participant’s participation in the Plan shall thereupon automatically terminate
and the respective Company shall notify the Administrator of such termination
in writing. The Administrator shall, as soon as is practicable, distribute to
the Participant or his or her legal representative, the number of shares in the
Street Account allocated to such Participant. Fractional shares shall be
distributed in cash.


A Participant may also completely withdraw from the Plan
by so declaring on a form to be supplied by the Administrator. In such event,
the Administrator shall, as soon as practicable, distribute to the Participant
the number of shares in the Street Account allocated to him or her. Fractional
shares shall be distributed in cash.


Upon termination of participation or withdrawal from the
Plan, Payroll Deduction Amounts withheld from the Participant’s salary or wages
not yet delivered to the Administrator pursuant to Section 7 will be
returned to him or her or, in the case of death, to his or her estate, without
interest or any Company Matching Amount in connection therewith.













12.          Voting and Other Rights


Except as otherwise provided herein, all rights of a
holder of Common Stock shall vest in a Participant with respect to the Common
Stock standing in the Street Account on such Participant’s behalf.


13.          Transfer of Rights and Common Stock


Unless applicable state or federal law requires a contrary
result:


(a)           A
Participant in the Plan may not assign, transfer, hypothecate, encumber,
commute or anticipate an interest in the Plan, in any cash amount held by the
Companies, the Administrator or Brokerage Firm pursuant to the Plan on behalf
of each Participant for the purchase of Common Stock or in any Common Stock
that may be held in the Street Account on the Participant’s behalf;


(b)           Neither
the interest of a Participant in the Plan nor in any cash amount held by the
Companies, the Administrator or Brokerage Firm pursuant to the Plan on behalf
of each Participant for the purchase of Common Stock nor in any Common Stock
that may be held in the Street Account on the Participant’s behalf shall in any
way be subject to any legal process or be levied upon or attached for payment
of any claim against the Participant; and


(c)           Any such
attempted assignment, transfer, hypothecation, encumbrance, commutation or
anticipation and any such attempted levy, attachment or other subjection to
legal process shall be void and shall not be recognized by the Administrator,
the Companies or the Brokerage Firm, as applicable.


14.          Withholding on Company Matching Amounts


All Company Matching Amounts shall be treated as “wages”
for services rendered by the Participant and will be subject to withholding for
income and employment taxes.


15.          Amendment, Suspension and Termination of the Plan


The Plan shall automatically terminate on June 30,
2013 unless terminated prior to that date pursuant to this Section.


Zenith’s Board of Directors may from time to time amend,
suspend or terminate in whole or in part, and if terminated may reinstate, any
or all of the provisions of the Plan, except that no amendment, suspension or
termination may be made which, in the judgment of such Board of Directors, will
retroactively affect adversely the rights of any Participant in the Plan
without the prior written consent of such Participant.


The Plan may be suspended or terminated only upon ten
(10) days’ prior written notice to the Administrator. In the event of
suspension or termination of the Plan:


(a)           Each
Company shall deliver to the Administrator all Payroll Deduction Amounts and
Company Matching Amounts. Such delivery shall be accompanied by a transmittal
listing the names of Participants and Payroll Deduction Amounts and Company
Matching Amounts corresponding to each Participant.













(b)           On the
business day preceding the effective date of termination or suspension of the
Plan, the Administrator shall direct the Brokerage Firm to purchase for each Participant
as many shares of Common Stock as the amount of cash, if any, then held for
each Participant pursuant to the Plan will permit and to deposit such Common
Stock into the Street Account.


(c)           The
Administrator shall, as soon as is practicable following suspension or
termination of the Plan, distribute to each Participant or his or her legal
representative the number of shares of Common Stock in the Street Account
allocated to such Participant.


16.          Interpretation


The Board of Directors of Zenith shall have full power
and authority to interpret and construe any and all provisions of this Plan
finally and conclusively as to all persons and entities having an interest
thereunder, to adopt rules and regulations not inconsistent with the Plan for
carrying out the Plan or for providing for matters not specifically covered in
the Plan and to alter, amend and revoke any rules or regulations so adopted.


17.          Administrator


The Administrator shall be appointed by Zenith’s Board of
Directors to administer the Plan and may be discharged at any time in the sole
discretion of such Board of Directors. Consequently, nothing in the Plan shall
be deemed to create any obligation on the part of Zenith or the Administrator
that the Administrator shall continue to administer the Plan. In the event that
the Administrator shall cease to administer the Plan, Zenith may appoint any
other person(s) or entity to administer the Plan.


18.          Adoption


This Plan may be adopted by any direct or indirect
subsidiary of Zenith through action of the Board of Directors of such
subsidiary.


19.          Brokerage Firm


The Brokerage Firm shall be engaged by the Zenith’s
management and such engagement may be terminated at any time in the sole
discretion of such Board of Directors. Consequently, nothing in the Plan shall
be deemed to create any obligation on the part of Zenith or the Brokerage Firm
that the Brokerage Firm shall continue to serve as Brokerage Firm under the
Plan. In the event that the Brokerage Firm is terminated, Zenith’s management
may engage any other Brokerage Firm to serve under the Plan.