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Unless your state rules are different Builders insurance is mandatory. Go through your paperwork/contract again. Just looked over my last one and it covered insolvency, death, or disappearance of builder and loss/damage (with limitations) due to inability to rectify works due to the above...

Who signed off on the slab down payment? 1.6m is a huge amount and should have been quite noticeable. There must have been some sort of retaining wall going in as well on back and sides? Or is it the case the builder has actually built to the plan and you did not understand the height...