What happens when a 4-20mA sensor is connected in reverse to receiver?
I need to build a 4-20ma to 1-5v converter circuit.


That's easy; it's the 250 ohm resistor shown in your top circuit.


  Now I need to implement some protection features like reverse polarity
  protection.


Make the resistor a 3 watt type and it will take the full 24 volts forwards or backwards without being destroyed. You have to ensure that any circuit attached to the 250 ohm resistor is capable of withstanding 24 volts forwards or reverse of course but that's simple usually.