So firstly, sorry to hear this, sounds like you've had a terrible time. From your description though, things can only really get better.
Recently i've been involved in a lot of employee law, redundancies, firings etc - the joys of being part of a c**nt cityboy business. Needless to say, after 90% of my team was made redundant, i've quit, and start a new (magnitudes better) job in a month. Most often, the grass IS greener ...
The Employee Tribunal, and the CAB are great (and free, and easy to contact) - thoroughly recommend a call to them for advice. One thing i did think is to check your contract (are you contractor or permy?) for mention of conflicting business/outside interests. I know most employment contracts i've signed tend to specifically state all work i do (in and out of 'the company') is owned by the company, and i cant work for another company at the same time, or that if i did want to - or if i wanted outside interests, i have to seek written permission. As harsh and stupid as this is, it's pretty normal. -- Aside from the above mentioned 2year+ comments, i'd maybe still consider confirming where you stand.
The alternative, is do nothing, move on and leave it behind you as a life lesson. You have to weigh up how stressed you are right now, how much pressure it would add to fight back, combined with the pressure you're now under to find a new role, etcetc. It really does sound like you're better off out of the place, it's just a shame they did it and not you.
I'm sure most people on here have considered at one time or another, dropping everything and going it alone - at least you're not starting from scratch - and you've got the tools, skills and experience to expand on. If you work hard enough, anything is achievable, you could be regularly detailing F40's in the near future, and i'd rather do that than work in insurance
Best of luck.