docs: add privacy and security policies

PRIVACY.md

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+# Privacy & Data Handling
+
+This repository contains:
+- a plugin package (`plugins/compound-engineering`) made of markdown/config content
+- a CLI (`@every-env/compound-plugin`) that converts and installs plugin content for different AI coding tools
+
+## Summary
+
+- The plugin package does not include telemetry or analytics code.
+- The plugin package does not run a background service that uploads repository/workspace contents automatically.
+- Data leaves your machine only when your host/tooling or an explicitly invoked integration performs a network request.
+
+## What May Send Data
+
+1. AI host/model providers
+
+If you run the plugin in tools like Claude Code, Cursor, Gemini CLI, Copilot, Kiro, Windsurf, etc., those tools may send prompts/context/code to their configured model providers. This behavior is controlled by those tools and providers, not by this plugin repository.
+
+2. Optional integrations and tools
+
+The plugin includes optional capabilities that can call external services when explicitly used, for example:
+- Context7 MCP (`https://mcp.context7.com/mcp`) for documentation lookup
+- Proof (`https://www.proofeditor.ai`) when using share/edit flows
+- Other opt-in skills (for example image generation or cloud upload workflows) that call their own external APIs/services
+
+If you do not invoke these integrations, they do not transmit your project data.
+
+3. Package/installer infrastructure
+
+Installing dependencies or packages (for example `npm`, `bunx`) communicates with package registries/CDNs according to your package manager configuration.
+
+## Data Ownership and Retention
+
+This repository does not operate a backend service for collecting or storing your project/workspace data. Data retention and processing for model prompts or optional integrations are governed by the external services you use.
+
+## Security Reporting
+
+If you identify a security issue in this repository, follow the disclosure process in [SECURITY.md](SECURITY.md).

SECURITY.md

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+# Security Policy
+
+## Supported Versions
+
+Security fixes are applied to the latest version on `main`.
+
+## Reporting a Vulnerability
+
+Please do not open a public issue for undisclosed vulnerabilities.
+
+Instead, report privately by emailing:
+- `kieran@every.to`
+
+Include:
+- A clear description of the issue
+- Reproduction steps or proof of concept
+- Impact assessment (what an attacker can do)
+- Any suggested mitigation
+
+We will acknowledge receipt as soon as possible and work with you on validation, remediation, and coordinated disclosure timing.
+
+## Scope Notes
+
+This repository primarily contains plugin instructions/configuration plus a conversion/install CLI.
+
+- Plugin instruction content itself does not run as a server process.
+- Security/privacy behavior also depends on the host AI tool and any external integrations you explicitly invoke.
+
+For data-handling details, see [PRIVACY.md](PRIVACY.md).