SECURITIES AND EXCHANGE COMMISSION

                       Washington, DC 20549



                       	    FORM 8-K

                          CURRENT REPORT
                PURSUANT TO SECTION 13 OR 15(D) OF
                THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 1, 1998



                  		INTERCARGO CORPORATION
          (Exact Name of Registrant as Specified in Charter)



DELAWARE                      0-16748                  36-3414667
(State or other         (Commission File Number)  (IRS  Employer Identification
Jurisdiction of                                  								No.)
Incorporation)

          1450 AMERICAN LANE, 20TH FLOOR, SCHAUMBURG, ILLINOIS  60173
               (Address of Principal Executive Office)   (Zip Code)


      Registrant's telephone number, including area code:  (847) 517-2990



                                NOT APPLICABLE
         (Former Name or Former Address, if Changed Since Last Report)








ITEM 5.   OTHER  EVENTS.   On  December  1,  1998,  Intercargo  Corporation
("Intercargo"), a Delaware corporation, and X.L. America,  Inc. ("X.L."), a
Delaware  corporation and wholly-owned subsidiary of EXEL Limited,  entered
into an Agreement and Plan of Merger dated as of December 1, 1998, pursuant
to  which  Intercargo  will  merge  with  and  into  X.L.  (the  "Merger").
Pursuant to the Merger, the shares of common stock of Intercargo issued and
outstanding  immediately  prior to the Merger will be converted into $12.00
in cash.  Consummation of the  Merger  is  subject  to  the approval of the
Merger  by  the shareholders of Intercargo, governmental approvals  and  to
specified closing  conditions.   Security  Insurance  Company  of Hartford,
which   through   a  wholly-owned  subsidiary  owns  approximately  26%  of
Intercargo's outstanding  common  stock, has entered into an agreement with
X.L. to vote for the Merger, subject  to  the  terms and conditions of such
agreement.

ITEM 7.   FINANCIAL  STATEMENTS,  PRO  FORMA  FINANCIAL   INFORMATION   AND
EXHIBITS.   The  Company  is  filing with this current report a copy of the
following document.

          (c)  Exhibits.

               (2) Agreement and  Plan  of  Merger  by  and  among X.L. and
          Intercargo, dated as of December 1, 1998.



FORWARD LOOKING STATEMENTS

This statement includes forward-looking information as that term is defined
in  the  Private Securities Litigation Reform Act of 1995 and is  therefore
subject to certain risks and uncertainties.  There can be no assurance that
actual results,  business  conditions,  business  developments,  losses and
contingencies and local and foreign factors will not differ materially from
that  suggested  in  the  forward looking statements as a result of various
factors including market conditions, competition, reinsurance availability,
foreign affairs, and natural disasters.






                            SIGNATURES

     Pursuant to the requirements  of  the Securities Exchange Act of 1934,
the registrant has duly caused this report  to  be  signed on its behalf by
the undersigned hereunto duly authorized.



INTERCARGO CORPORATION
(Registrant)

By:/S/ MICHAEL L. RYBAK
     Michael L. Rybak
     Chief Financial Officer and Vice President


     Dated: December 3, 1998