Use a Licensed Builder
The first thing you need to know when engaging a builder is whether they are licensed. Only licensed builders can be in charge of significant building projects. While the laws do vary somewhat from state to state, a licensed builder has to provide a warrantee for their work. For more information and to check if your builder is licensed by visiting www.licensedtrades.com.au/licensed/builder.
Check that your builder is registered with the Building Practitioners Board in your state. Ask for their registration number and double check their registration on the building authority website in your state.
Domestic building insurance
For a builder to undertake any works valued at more than $16,000 they must take out Domestic building insurance (also called builders warranty insurance) for the project. The amount may vary from state to state so please do your own research as to what the requirements are in your state.
This type of insurance protects you in the event that your builder dies, becomes insolvent (goes broke) or simply dissapears.
Learn more about this from the Consumer Affairs website for your state. Here's a link for the Victorian Consumer Affairs Webpage on Builders Insurance. https://www.consumer.vic.gov.au/housing/building-and-renovating/defects-delays-and-insolvency/insurance-and-insolvency
All builders must use a written major domestic building contract. Seeking independent legal advice to help you understand and negotiate the contract can protect you.
A building surveyor exists to ensure that the works are undertaken as described and to industry standards. They inspect the home at intervals throughout the build and sign off on the works for each stage. You can appoint a private building surveyor of your choice. You're builder isn't legally able to appoint one for you. The law is designed to protect you so that the surveyor remains independent. You can search for a surveyor on the Building Authority Website in your state.
Public Liability Insurance
Ask your builder to provide you with a certificate of their current public liability policy.
Planning and Building Permits
It's your responsibility to ensure that planning and building permits are obtained. However, it is most common for your building designer, architect or builder to arrange the applications for you. You'll need to have a conversation with them to decide who will be best positioned to manage the application process as that can be determined by the floorplan design process you choose to use (builder, designer or architect).