U.K. GROCERY CHAIN GOES ON ALERT AFTER SMALL BOMBS FOUND

LONDON -- Employees of a U.K. supermarket chain have been cautioned to be extra vigilant after the discovery of several explosive devices planted near supermarkets throughout the London area recently.

Police think the small bombs are the work of someone known as the "Mardi Gra" bomber, who mounted a similar campaign against branches of Barclays Bank P.L.C. in 1995 and 1996. During the two-year period, six parcel bombs were sent to branches of the bank, but no financial demands ever were made, and the campaign ceased as abruptly as it started, a Barclays Bank spokeswoman confirmed.

Similarly, no demands have been made in the latest series of incidents, and it is not clear why the chain, Sainsbury P.L.C., has been singled out, a Sainsbury spokesman said.

Six suspicious packages have been found, though two were discovered to be false alarms. They were found in or near six different stores. One was found near a bus stop next to a store; others were found varying distances -- one was about 500 yards away -- from the locations.

Several of the bombs have exploded, but no one has been seriously injured. However, the incidents have resulted in several of the stores being evacuated and surrounding areas cordoned off, said the spokesman.

Sainsbury, one of the largest British retailers, has told employees in all its 381 stores to be alert for suspicious packages. The company also "is stepping up security arrangements," said the spokesman, who would not provide details.

Sainsbury would not comment on whether it is insured for the incidents, but most standard property/casualty insurance policies cover this type of incident, according to the Assn. of British Insurers and market executives.

Although British insurers introduced a terrorist exclusion several years ago for losses of more than 100,000 pounds ($165,900), terrorist attacks are specified as being politically motivated.

"This type of incident would be covered under a standard fire (property) policy as malicious damage," said Philip Terry, terrorism underwriter with Lloyd's of London syndicate 33, managed by Hiscox Syndicates Ltd.

"If it is an act specifically against a company rather than a government, it is covered by a standard fire policy as malicious damage," agreed Leslie Lucas, Chief Executive of Pool Reinsurance Co. Ltd., the mutual reinsurance company set up by the U.K. insurance industry to cover terrorist risks.

Supermarket chains and other retailers often, however, take out separate coverage against malicious damage such as product tampering because they are perceived to be a high risk, said Lloyd's underwriter Bernie De Haldevang, a deputy underwriter of syndicate 1028.

The syndicate, managed by Wellington Underwriting Agencies Ltd., provides terrorism and other coverage for a "lot of big retail chains" and even considers providing business interruption coverage when an incident does not involve any physical damage, such as the precautionary evacuation of a store, said Mr. De Haldevang.