Small Business Boiler and Machinery required property damage limits is:

The correct answer, which states that small business boiler and machinery required property damage limits is set at 80% of building replacement value, aligns with the general guidelines established to ensure that businesses maintain ample coverage to protect against potential losses.

Insurance policies typically require businesses to insure their property for at least a percentage of its replacement cost to avoid penalties in the event of a claim. By setting the limit at 80%, businesses are encouraged to have a substantial amount of coverage that is generally considered sufficient to recoup losses after a loss event, yet still allowing for some fluctuations in market values and replacement costs. This approach balances the need for adequate coverage while keeping premiums at a manageable level.

The other options reference different percentages that are not standard for this type of coverage in many jurisdictions, potentially leading to insufficiencies in loss recovery if a claim were made. Limiting insurance coverage below the specified percentage can result in co-insurance penalties, where the insured may not receive full compensation for a loss because the coverage limit is less than required. Hence, 80% serves as an important benchmark in ensuring adequate protection for businesses using boiler and machinery equipment.