Just as a caveat, let me add that I was riding my King Quad one day far from the truck when the oil light began to flicker. Warranty was not a consideration, it was way out of coverage. I took the gamble and rode it, as there was nothing abnormal about its operating sound and it might just be the sending unit gone bad. As it happened that's exactly what had happened, bad sending unit. It was 'warning' me of a non problem.
Every situation has its own merits and this isn't to suggest one should disregard a warning light, just telling what happened that time.
Galling of plain bearings and piston/rings occurs after oil pressure is lost, not at the same time as a warning light is activated. If it was always too late once a light came on then what purpose would an oil pressure light serve at all?
I agree that for a dealer to claim that damage from a failed oil pump (for example) on a properly maintained machine, resulting from operating it after said light has activated, should not be covered is a cop out attempt. After all, what if that light comes on when climbing a steep hill? Does that dealer expect a rider to obediently and promptly shut the machine off and tumble back down to the bottom?
I take the stand that lost oil pressure in a properly maintained and operated machine will be the result of a mechanical failure, and subsequent damage from that failure might be reduced if the operator immediately stops the engine, WHERE PRACTICAL TO DO SO but the core problem was the mechanical failure, not the operators response to that failure, therefor it should be covered.