ITEM 8.01 OTHER EVENTS

On July 2, 2009, Commerce Group Corp. (the "Company") and San Sebastian Gold Mines, Inc., an affiliate which is 82 1/2% owned by the Company, submitted to the International Centre for Settlement of Investment Disputes (ICSID) a notice of arbitration to commence international arbitration proceedings against the Government of El Salvador under the Central America Free Trade Agreement-Dominican Republic ("CAFTA-DR"). The Company received no response to the Notice of Intent to commence international arbitration proceedings it served upon the El Salvadoran Government on March 17, 2009.

The Company contends that the government of El Salvador has frustrated its efforts to develop its mining interests in the country of El Salvador in violation of CAFTA-DR. On September 13, 2006, the government of El Salvador, without justification or any forewarning, revoked the Company's permits which it had issued for the San Sebastian Gold Mine exploitation concession and the San Cristobal Mill and Plant, effectively terminating the Company's right to mine and process gold and silver. On October 28, 2008, the government of El Salvador denied the Company's application to extend its exploration permits in connection with the New San Sebastian Exploration License and the Nueva Esparta License.

The arbitration will be administered under the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States and under the Rules of Procedure for Arbitration Proceedings of the International Centre for Settlement of Investment Disputes ("ICSID"). ICSID is an affiliate of the World Bank and is headquartered in Washington, D.C.

FORWARD-LOOKING STATEMENTS

Certain statements in this release, and other written or oral statements made by the Company, including the use of the words "expect, "anticipate," "estimate," "project," "forecast," "outlook," "target," "objective," "plan," "goal," "pursue," "on track," and similar expressions, are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance, or achievements of the company to be different from those expressed or implied. The Company assumes no obligation and does not intend to update these forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, without limitation: competitive and general economic conditions, adverse effects of litigation, the timely development and acceptance of services, significant changes in the competitive environment, the failure to generate or the loss of significant numbers of customers, the loss of senior management, increased government regulation or the company's failure to integrate its acquired companies to achieve the synergies and efficiencies described in the "Management's Discussion and Analysis" section of the Company's Form 10-K and other reports and filings with the Securities and Exchange Commission, which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K.