I am one and have been contracting for a few years and best thing I ever did, do it. The choice between limited and umbrella depends on you, if you feel comfortable setting up a limited it will let you take home more cash but the security of an umbrella can be good until you get off the ground. parasol were fine for a couple of years for me but I clear loads more now I have a limited co. If you go limited, find a good accountant and discuss how it will work for you.
Proffesional indemnity, yes get it, I use Hiscox.
Getting a role, jobserver and CWjobs are good and as descibed above if your CV is strong, set up some searches and you should get some calls. Both have a daily email option of the roles freshly posted, very useful.
In Glasgow I am not sure what the job market is like, widening it to Edinburgh will get a few of the big financial players. The job market isnt bad currently, at least in London, considering Xmas/NY slow down usually happens theres a few jobs around. More typically arrive mid Jan.
As for Titanium, absolutely.