To receive full replacement cost recovery under a BOP, what percentage of the property's full replacement value must be maintained?

To receive full replacement cost recovery under a Businessowners Policy (BOP), it is essential to maintain coverage at a minimum of 80% of the property's full replacement value. This threshold is significant because it helps ensure that the policyholder has adequate coverage to fully restore or replace their property in the event of a loss.

In insurance terms, maintaining this level of coverage is often referred to as "coinsurance." If the insured property is covered at less than the required percentage of its replacement value, any claims made may be subject to a coinsurance penalty, which can result in a reduced payout. By keeping coverage at or above 80%, the policyholder can avoid this penalty and ensure that they will recover the full cost of replacement without financial shortfall after a loss.

Thus, having 80% coverage aligns with the typical standards set by insurance companies to promote adequate risk management and protect both the insurer and the insured from financial losses that could arise from being underinsured.