I would not have told her about the insurance part. But I would get my products out of there asap, I would not want customers to confuse my candles with hers when they blow up in their faces. For the rest you got to tell yourself it is not personal it is just business, she tought she could make a bigger profit by making her own candles. She'll either stop in a few months when people complain that her candles are not that great or she'll go after your other accounts.