This happened at my shop a few years ago.4:30 oil change on friday and the new guy did a great job just didn't ad oil.Customer made it a few miles,he called and we added oil but the damage was done.We bought a reman long block and installed it and no,insurance wasn't involved.Its cheaper to do the repair and eat it then deal with higher rates.Business insurance is bad enough.
They won't be able to "repair" the engine from scoring on all moving parts,it will need a reman engine and in my experience,a low mileage used engine.Voice your concerns to them if the get off track or want to "split" the cost.
Not true. A machine shop can either grind the crank under 10 or 20 thousandths, or weld up the main and rod journals and grind it standard if the damage is bad enough.
The reason why this isn't done, is because the cost of a junkyard or remanufactured engine is much much less than the cost of rebuilding a blown one. Simple economics.
ANYTHING can be fixed if you have the proper TOOLS and TRAINING. ANYTHING. Doesn't mean it's economically feasible, but it can be done.
From my experience, an engine will survive if it is run for a VERY SHORT time with little or no oil. I'm talking seconds here, up to 30ish seconds, tops. The main and rod bearings will IMMEDIATELY start to wear excessively as soon as the critical oil film goes missing, causing a tell-tale rod knock deep in the engine. They quickly overheat, spin, and weld themselves to the crank, at which point the engine either seizes, or causes damage to the main bearing saddles, main caps, and rods, and then seizes. Usually if the damage is this catastrophic, repair is not recommended, as machine shop labor is very expensive for such an operation.
Any time that low oil light comes on, SHUT THE VEHICLE OFF IMMEDIATELY. Not wait till you get home 5 miles down the street, not to the next intersection, NOW! Irreparable damage is the result otherwise, as the original poster will find out VERY SOON...