I haven’t paid out anything yet but construction has begun
You should request a list of all the contractor's subcontractors and suppliers. Then you should require that he provide patial lien waivers from every subcontractor and supplier paid on every month and refuse to make future payments until those lien releases are provided. You might also check with your local title company about purchasing an
extended policy of title insurance which would provide insurance coverage covering certain liens which may be unfiled or unrecorded.
There is no way for me to attach files to my answer but if you email me at firstname.lastname@example.org and I will send you copies of lien releases you can use.
Thank you! Very valuable advice and good recommendations on how to proceed.