USI Holdings Corporation to Appeal Copyright Infringement Dispute

USI Holdings Corporation (Nasdaq: USIH) ("the Company")
announced that, yesterday, a jury returned a verdict against USI
MidAtlantic, Inc. ("USIM"), a subsidiary of the Company, in the amount
of approximately $16.6 million in a copyright infringement case. The
case, William A. Graham Company v. Thomas P. Haughey and USI
MidAtlantic, Inc. (U. S. District Court, Eastern District of
Pennsylvania, CA No. 05-612) was brought in Federal District Court in
Philadelphia in February 2005. The plaintiff alleged that USIM and Mr.
Haughey used materials derived from plaintiff's copyrighted insurance
manuals to solicit and obtain insurance business. Mr. Haughey had been
employed by plaintiff prior to his becoming employed by a predecessor
of USIM. The plaintiff sought damages representing all of the
commissions earned by USIM and Mr. Haughey from every client that
received any proposal that contained any information copied from
plaintiff's manuals.
   Following the trial judge's rulings favorable to USIM and Mr.
Haughey on summary judgment, the case was tried to a jury during the
week of June 19, 2006, and the jury returned its verdict against USIM
yesterday. The jury also returned a verdict against Mr. Haughey in the
amount of approximately $2.2 million.
   The Company previously notified its insurance carriers of the
plaintiff's claim. Certain of the insurance carriers have denied
coverage under their policies, others are evaluating their positions,
and one carrier has provided some coverage.
   David L. Eslick, Chairman, President and CEO of the Company
stated, "We could not disagree more strongly with the jury's
conclusion that our subsidiary, USIM, or Thomas Haughey infringed
Graham's copyright or that the commissions we received were
attributable to the use of Graham's materials. We intend to pursue
vigorously avenues for post-trial relief from the judgment and will
continue to pursue aggressively USIM and Tom Haughey's coverage under
applicable insurance policies."
   The Company intends to file a motion with the trial court to set
aside or significantly reduce the judgment. If the Company's motion is
denied, the Company intends to pursue an appeal. The Company is
currently evaluating the judgment, including the Company's litigation
and insurance coverage options. If the Company subsequently determines
that a contingency reserve is required, the amount will be reflected
in the second quarter financial statements. As of March 31, 2006, we
had not established a contingency reserve on this case based on the
information we considered at the time. We therefore expect that our
contingency reserve will increase, and that an increase could be
material and could negatively impact the Company's financial results
for the second quarter of 2006.
   This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," "will" or words of similar meaning and include, but are
not limited to, statements about the resolution of claims, lawsuits
and related proceedings . These statements are based on management's
current expectations and are inherently subject to uncertainties and
changes in circumstances. Detailed information about the factors that
could cause actual results to differ materially from those described
in the forward-looking statements is contained in USI's filings with
the SEC. Some of those factors include matters related to claims,
lawsuits and related proceedings. All forward-looking statements
included in this press release are made only as of the date of this
press release, and USI does not undertake any obligation to publicly
update or correct any forward-looking statements to reflect events or
circumstances that subsequently occur or of which USI hereafter
becomes aware.

   About USI Holdings Corporation

   Founded in 1994, USI is a leading distributor of insurance and
financial products and services to businesses throughout the United
States. USI is headquartered in Briarcliff Manor, NY, and operates out
of 68 offices in 19 states. Additional information about USI may be
found at www.usi.biz.