WAIVER



         Pursuant to an Employment Agreement dated November 20,
1990 (the "Employment Agreement"), Norman P. Blake, Jr. (the
"Executive") is serving as the Chief Executive Officer of USF&G
Corporation (the "Corporation") based upon the terms and
conditions set forth therein.  In consideration of certain stock
options granted by the Corporation to the Executive on
November 10, 1993, the Executive and the Corporation hereby agree
as follows:

              1.   The Executive hereby waives all rights to
         annual base salary under Section 1.2(a) of the
         Employment Agreement which exceeds (i) Seven
         Hundred and Fifty Thousand Dollars ($750,000) for
         the twelve-month period ending November 26, 1994,
         and (ii) Eight Hundred Thousand Dollars ($800,000)
         for the twelve-month period ending November 26,
         1995.

              2.   Notwithstanding the foregoing waiver of
         base salary, all profit sharing, bonuses, insurance
         and other benefits and perquisites, stock options,
         incentive and other performance awards,
         supplemental retirement income and other deferred
         compensation provided under Section 1.2 of the
         Employment Agreement or otherwise provided by the
         Corporation during the remainder of the Employment
         Period (as defined in Section 4.1 of the Employment
         Agreement) shall continue to be determined using as
         the Executive's annual base salary the Executive's
         annual base salary under Section 1.2(a) of the
         Employment Agreement determined without regard to
         this Waiver (One Million, Forty-One Thousand, Two
         Hundred Eighty-Five Dollars ($1,041,285) for the
         twelve-month period ending November 26, 1993,
         increased annually for each twelve-month period
         thereafter during the Employment Period by a
         percentage based solely on the Executive's
         performance, which percentage shall not be less
         than the average percentage increase in annual base
         salary for the four (4) executives most senior in
         rank of the Corporation other than the Executive,
         unless for any twelve-month period the Compensation
         Committee of the Board of Directors
         provides the Executive with a written statement of
         the specific reasons, based solely on the
         Executive's performance, for a lesser or no annual
         increase for such period).  In considering annual
         awards, stock options and other incentive
         compensation, the stock options to acquire three
         hundred thousand (300,000) shares of Common Stock
         of the Corporation granted to the Executive on
         November 10, 1993, as consideration for this Waiver
         shall be disregarded.

              3.   At least annually during the remainder of
         the Employment Period, the Executive shall receive
         from the Corporation a statement of all benefits
         and deferred compensation earned or accrued for the
         year and accrued and unpaid through the date of the
         statement.

              4.   This Waiver shall not constitute an
         amendment of any portion of the Employment
         Agreement.

         IN WITNESS WHEREOF, the parties have executed and
delivered this Waiver as of the 10th day of November, 1993.

WITNESS:                          USF&G CORPORATION



 JOHN A. MACCOLL                  DAN L. HALE
                                  Dan L. Hale,
                                  Executive Vice President


WITNESS:                          EXECUTIVE



 THERESA L. ABATO                 NORMAN P.  BLAKE, JR.
                                  Norman P. Blake, Jr.