(1) This section applies if—
(a) a person (the insured ) has entered into a contract of insurance by which the insured is indemnified against liability to pay damages or compensation; and
(b) an event happens that gives rise to a claim against the insured for damages or compensation
(2) On the happening of the event, the amount of the insured's liability in relation to the event becomes a charge on all insurance money that is or may become payable in relation to the liability.
(3) If, when the event happens, the insured is a corporation that is being wound up, or if any subsequent winding-up of the insured is taken to have begun on or before the happening of the event, subsection (2) applies despite the winding-up.
(4) A charge under this section has priority over all other charges affecting the insurance money.
(5) However, if the insurance money is subject to 2 or more charges under this section—
(a) the charges have priority between themselves in the order of the happening of the events out of which the liabilities arose; and
(b) charges that arise out of events happening on the same day rank equally between themselves.