diff --git a/bin/failproofai.mjs b/bin/failproofai.mjs
old mode 100644
new mode 100755
index e6f4d0e7..9295f2cc
--- a/bin/failproofai.mjs
+++ b/bin/failproofai.mjs
@@ -89,6 +89,37 @@ if (args.includes("--list-policies")) {
   process.exit(0);
 }
 
+// Unknown flag guard — must appear after all known-flag branches
+const knownFlags = ["--version", "-v", "--hook", "--install-policies",
+                    "--remove-policies", "--list-policies"];
+const unknownFlag = args.find(a => a.startsWith("-") && !knownFlags.includes(a));
+
+if (unknownFlag) {
+  function levenshtein(a, b) {
+    const m = a.length, n = b.length;
+    const dp = Array.from({ length: m + 1 }, (_, i) =>
+      Array.from({ length: n + 1 }, (_, j) => (i === 0 ? j : j === 0 ? i : 0))
+    );
+    for (let i = 1; i <= m; i++)
+      for (let j = 1; j <= n; j++)
+        dp[i][j] = a[i - 1] === b[j - 1]
+          ? dp[i - 1][j - 1]
+          : 1 + Math.min(dp[i - 1][j], dp[i][j - 1], dp[i - 1][j - 1]);
+    return dp[m][n];
+  }
+
+  const primary = ["--version", "--hook", "--install-policies",
+                   "--remove-policies", "--list-policies"];
+  const closest = primary.reduce((best, flag) => {
+    const dist = levenshtein(unknownFlag, flag);
+    return dist < best.dist ? { flag, dist } : best;
+  }, { flag: primary[0], dist: Infinity });
+
+  console.error(`Unknown flag: ${unknownFlag}`);
+  console.error(`Did you mean: ${closest.flag}?`);
+  process.exit(1);
+}
+
 // Dashboard launch — always production mode
 const { launch } = await import("../scripts/launch");
 launch("start");
diff --git a/package.json b/package.json
index 40023c3b..1893526a 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
   "name": "failproofai",
-  "version": "0.0.1-beta.1",
+  "version": "0.0.1-beta.2",
   "description": "Open-source hooks, policies, and project visualization for Claude Code & Agents SDK",
   "bin": {
     "failproofai": "./bin/failproofai.mjs"