500 problem, opinions needed. Kinda long.

Back on September 4th i purchased my wife a 2005 Vulcan 500 and myself a 2005 800A. We have had a blast riding and racked up about 1600 in the first 6 weeks we had them. We had previous experience with both dirt bikes and street bikes but had not rode in about 6 years. Needless to say we are having a blast.
The last weekend in October we were out riding on the Natchez Trace and my wifes bike started back firing and cutting out. This was only occuring at speeds of 50 to 60 miles an hour and was intermittent. I checked the bike out and could find no obvious problem. It was only doing it at cruising speeds and not at slow speeds so we headed back for home, we were about 50 miles away at the time. After a half hour nature called so we stopped at a rest area and took a break. My wife told me the problem was about the same and did not seem any worse. I had been riding behind her and could tell when it happened as the bike would slow or backfire. I offered for the 2nd time to switch bikes but she would have no part of it.
So i am following Deb as we pull back on the Trace and see her shift into 2nd gear at about 15 MPH. About that time the bike backfires and dies on her, the back wheel locked up instantly. As she was in the middle of a turn she had very little time to react and down she went. She took a pretty hard hit but luckily she was OK. Nothing was broke on the bike but the tank did have a good size dent in it.
Since we were about 20 miles from home at this point i decided to go and get my truck and trailer it home from there.
When i got the bike home it started very hard and ran about the same, which i expected. Called the dealer and they said to bring it in and they would take care of it.
Yesterday they called and said they had rode it and experienced the same problem. Checked it out and found that the negative battery cable had been over torqued and had busted the terminal and was causing the problem. Said it was definitely a warranty issue and they would take care of it.
So i asked the service manager if there is anything they can do about the tank. He said no that she should have put her feet down or pulled in the clutch. I tried to explain to him again exactly what happened and that this problem caused her to fall. He agreed with me but said i needed to call Kawasak as that was their call and not the dealers. So i called and got the same response from them. In addition i was treated rather rudely by the first person i talked too.
So before i pursue this any further i wanted to get the some opinions from folks here. They admitted that the problem caused her to fall but that they are only responsible for the battery and terminals they replaced.
Your opinions on this would be appreciated.
KB