There isnt a problem with the actual sensors at the front..they are still functional (I assume..) since they were all working before the accident. You are right they weren't touched. However the sensing function is now not working because of a problem resulting from the damage to rear. So it does sound like the control unit.

No the body shop is an insurance recommended one since they supply a courtesy car and I need a car for work. If I chose a BMW shop I would not have had the courtesy car or would have had to rent one at my own expense.

At least I've got a bit more knowledge now for when I speak with the insurance company again.