Honestly, should they not get financially wiped out if they hit a city? Or do we just let them keep their money to fund criminal defense lawyers. I want the reaction to killing people to be more than "oops, that will be expensive".
I agree with you. I expect that should a city get hit, then international outcry would lead to the confiscation of all of the investor's assets, despite being shielded by a limited liability corporation.
For that reason the investors need insurance - and a very large amount of it considering the damage that a direct hit on a major city might cause. The investors would seek some sort of limit on the liability - say 100 billion dollars, and in return they should eagerly submit to regulatory oversight of their plans, procedures and operations.
In order to insure such an asteroid moving scheme and establish a premium, insurance companies must determine a risk probability distribution, and they must know what the maximum liability would possibly be. Over many decades, there may be observations of close calls or actual damage causing situations that can inform the actuarial calculation, but at the initial point its simply educated estimates.
So the investors chose that asteroid diameter so as to minimize potential damage due to an impact on Earth.