You are correct. "Everyone" and "every one" are two different forms and are sometimes, but not always interchangeable. Your example above is correct, as is the example:
"Everyone here is infected!" she shouted. "Every one of you is radioactive!"
You could reverse those, as in the line below:
"Every one here is infected!" she shouted. "Everyone of you is radioactive!"
This would be technically correct, but most competent editors would whack you for it, or at least cringe a lot.
A couple more examples of two different forms that sound alike but are mostly but not completely interchangeable: "alright" and "all right", and "already" and "all ready".
The mistake of this sort I see most often is "alot." There's no such word as "alot." The correct form is "a lot."
DLF (thankful he doesn't have to run his e-mail messages past an editor)