I let out my flat for a year and half through an agency as I thought that would be the easy option (I was out of the country), but it was such a pain. They just forwarded any problems to me and got me to deal with it in the same way as I would have had to do directly (as a poster above says finding your own quote for work can save you a lot of money). And it felt so expensive with the agency - cost was 10% of the rent but there were so many additional costs for their admin at the start and the end. I ended up really regretting the fact that I was losing so much money to them and they were doing nothing.
Also through an agency they find a tenant, which obviously has some positives, but the tenant in my place was a nightmare to deal with - wanting to reduce the rent, paying late, wanting things done that I'd pay for (painting a room a colour he wanted). Guess its a bit of luck if you get a good tenant or not, but if you're meeting them before agreeing anything then you can get some idea of how they'll be.
Regarding landlord insurance, I think my mortgage provider insisted I had it for them to agree to me letting it. If you have a mortgage, it might be worth checking with them.
Good luck with it!!
