Something chewed on it. Are there snails in the area?

Looks like slug damage.

Could be some kind of Caterpillar. Look all around the base of the plant in all the cracks and crevices, the soil, any other plants in the pot. Or could be something that ate and flew away, like a grasshopper type. Too bad. Your plant can recover but it will take some time. How maddening!

We have a lot of slugs in our area, as well as the occasional caterpillar. What is the best way to guard against both? Diatomaceous earth?

I would suggest Sluggo or the generic alternative for slugs. Must put out on a regular schedule. My plants are outside, on the patio, each pot on a brick or raised up on something. I think it helps to keep insects out. Keep the ground around the plants dry to discourage slugs. Keep a sharp eye on your plants. I'd say bring "special" ones inside, but the only insect damage I've had was on an inside plant (caterpillar!). As for flying insects, I don't know. Ditto for diatomaceous earth.