So far, the below suggestion (posted by a number of people here) works. Just make sure that the "model" and "boardID" do NOT have the "<" or ">" characters in them and it should work to get past at least the BIErrorDomain issue.
I was able to get past the "BIErrorDomain error 3" issue in Parallels as follows: On a real, supported Mac, run this command in Terminal:
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ioreg -l | grep board-id
2. Make a note of the board ID (mine is Mac-551B86E5744E2388, for example)
3. Run this command in Terminal:
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sysctl hw.model
4. Make a note of the hardware model (mine is MacBookPro14,3)
5. In the VM configuration, under Hardware -> Boot Order -> Advanced Settings -> Boot flags, enter the following (inserting the information noted above where shown):
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devices.machwmodel="<model>"
devices.smbios.board_id="<board ID>"
That should be enough to allow the installer to proceed.
CodeWrangler
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Ok, based on the replies, it looks like an issue with Parallels 15 and Big Sur...guess I'll try contacting parallels. Will report back here if anything useful is learned...thanks everyone.