# PolicyGuard: Prompt-Configurable Semantic DLP for LLM Coding Agents

arXiv: https://arxiv.org/abs/2608.02687 · HTML: https://mlsanity.com/paper/2608.02687/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in Agent threats, guardrails and governance, one of 16 directions in LLM agents and tool use.
- Builds on 10 of its 25 references that are in the map.
- First posted on arXiv 3 Aug 2026.

## Placed in

- LLM agents and tool use / [Agent threats, guardrails and governance](https://mlsanity.com/agents/agent-threats-guardrails-and-governance/)

## Builds on (most cited first, 10 of 10)

- [Language Models are Few-Shot Learners](https://mlsanity.com/paper/2005.14165/) (2020)
- [Evaluating Large Language Models Trained on Code](https://mlsanity.com/paper/2107.03374/) (2021)
- [Not what you've signed up for: Compromising Real-World LLM-Integrated Applications with Indirect Prompt Injection](https://mlsanity.com/paper/2302.12173/) (2023)
- [Llama Guard: LLM-based Input-Output Safeguard for Human-AI Conversations](https://mlsanity.com/paper/2312.06674/) (2023)
- [WildGuard: Open One-Stop Moderation Tools for Safety Risks, Jailbreaks, and Refusals of LLMs](https://mlsanity.com/paper/2406.18495/) (2024)
- [The Instruction Hierarchy: Training LLMs to Prioritize Privileged Instructions](https://mlsanity.com/paper/2404.13208/) (2024)
- [ShieldGemma: Generative AI Content Moderation Based on Gemma](https://mlsanity.com/paper/2407.21772/) (2024)
- [Signed-Prompt: A New Approach to Prevent Prompt Injection Attacks Against LLM-Integrated Applications](https://mlsanity.com/paper/2401.07612/) (2024)
- [Prεεmpt: Sanitizing Sensitive Prompts for LLMs](https://mlsanity.com/paper/2504.05147/) (2025)
- [CAPID: Context-Aware PII Detection for Question-Answering Systems](https://mlsanity.com/paper/2602.10074/) (2026)

## Abstract (arXiv)

AI coding agents accept free-form natural language prompts that may inadvertently contain credentials, personally identifiable information (PII), or proprietary business data. Existing data loss prevention (DLP) solutions rely on rigid regex patterns, model fine-tuning, or vendor-managed classifiers with limited customizability. We present PolicyGuard, a pre-model interception framework that classifies user prompts using an LLM guided by a natural language policy file. Our key contributions are: (1) the policy-as-prompt paradigm, where DLP classification criteria are defined entirely in a plaintext policy document editable by non-engineers without code changes or model retraining; (2) a sealed evaluation protocol with template-family-level data splits, hidden holdouts, and frozen test sets to rigorously assess generalization; and (3) a comprehensive empirical evaluation across 2,000 multilingual prompts demonstrating 96.5% effective block rate (EBR) with only 3.0% false positive rate (FPR) on a frozen test set of 927 prompts, and perfect 100% accuracy on a 217-prompt hidden holdout. Information-matched baseline experiments show that PolicyGuard's natural language format significantly outperforms equivalent content in JSON format (McNemar chi-squared = 31.58, p < 0.001) and dramatically outperforms zero-shot classification (Cohen's h = 0.915). Cross-model portability experiments demonstrate that the same policy achieves 86.4-96.5% EBR across four different LLMs without modification.